The recent gains put oil prices near their highest levels since late-December, with Brent now trading back above $80 a barrel
Oil prices rose in Asian trade on Thursday, extending gains to near one-month highs following stimulus measures from top importer China, although expectation of key U.S. economic data kept traders on edge.
Prices were also encouraged by a slew of strong purchasing managers index (PCI) readings from the U.S. and UK, which showed an improvement in business activity through early-January, offering positive cues for crude demand.
The recent gains put oil prices near their highest levels since late-December, with Brent now trading back above $80 a barrel. Oil prices were also trading positive for 2024 following a rough start to the year.
The People’s Bank of China (PBC) on Wednesday unexpectedly cut reserve requirements for local banks, freeing up more liquidity in another effort to foster economic growth. The move ramped up hopes over an economic bounce back in the world’s biggest oil importer, which was grappling with weak growth through 2023.
Data showing a massive drawdown in U.S. oil inventories also aided oil prices, particularly as severe cold weather conditions disrupted crude production in the country. But this notion was offset by a sustained build in gasoline inventories, as cold weather also dissuaded travel.
Brent oil futures expiring in March added 0.3% to $80.30 a barrel, while West Texas Intermediate (WTI) crude futures gained 0.4% to $75.27 a barrel by 01:03 GMT.
Both contracts were near levels last seen in late-December.
U.S. production disruptions added to concerns over tighter supplies in the coming months, particularly as a conflict in the Middle East showed little signs of stopping.
A weaker dollar also aided oil prices, as traders locked-in recent profits in the greenback after it soared to six-week highs. But the dollar stabilised on Thursday, in anticipation of several key U.S. economic cues, as well as a Fed meeting next week.
