Oil prices rose on Thursday, with Brent crude futures up 57 cents, or 0.7%, to $84.15 a barrel, and U.S. West Texas Intermediate crude for June up 56 cents, or 0.7%, to $79.55 per barrel. This upward momentum was driven by a larger-than-expected draw in U.S. crude inventories and higher Chinese imports.
According to the Energy Information Administration, U.S. crude inventories fell by 1.4 million barrels last week to 459.5 million barrels, more than analysts’ expectations of a 1.1 million-barrel draw. The decline in stockpiles was attributed to an increase in refinery activity by 307,000 barrels per day (bpd) during the period.
Shipments of crude to China, the world’s largest oil importer, also provided support to oil prices. In April, China’s crude oil imports totaled 44.72 million metric tons, or about 10.88 million bpd, a 5.45% increase from the previous year, according to customs data.
“Oil markets were buoyed by a larger-than-expected draw in the U.S. inventory data. The improved China trade balance data added to the upside momentum,” said Tina Teng, an independent market analyst.
The upbeat data from the U.S. and China, the two largest oil-consuming nations, helped to offset concerns over the ongoing conflict between Israel and Hamas in Gaza. While there were hopes of a ceasefire, Hamas said it was unwilling to make more concessions to Israel, and the U.S. indicated that the two sides were not far apart.
“While there may be some short-term relief for oil prices, it may be difficult to return to April’s high above the $90 per barrel level, where geopolitical tensions were at its peak,” said Yeap Jun Rong, market strategist at IG.