Oil prices rose 1% on Thursday on expectations that demand will strengthen as top oil importer China reopens its economy and on news U.S. crude inventories have risen less than expected.
U.S. West Texas Intermediate (WTI) crude futures were up $1.65, or 2.05%, at $82.06.
“China’s reopening is supporting demand prospects,” said UBS analyst Giovanni Staunovo.
“Also, market participants are closely tracking the upcoming OPEC+ JMMC meeting and the EU embargo on refined products.”
China has been easing stringent COVID-19 restrictions this month, with Beijing reopening its borders for the first time in three years.
“(Commodity) markets are set to tighten significantly should the reopening in China – the world’s largest driver of commodity demand – be orderly, and … we anticipate conditions to be ripe for commodity investor inflows,” MUFG analyst Ehsan Khoman said.
Meanwhile, U.S. crude inventories edged up by 533,000 barrels to 448.5 million barrels in the week ending Jan. 20, the Energy Information Administration (EIA) said.
That was short of forecasts for a 1 million barrel rise, though the EIA says crude stocks are at their highest since June 2021.
The OPEC+ ministerial panel meeting on Feb. 1 is likely to endorse the oil producer group’s current output levels, OPEC+ sources said.
Global economic growth is forecast to barely move above 2% this year, a Reuters poll of economists showed, suggesting that a further downgrade is possible. That was at odds with widespread optimism in markets since the beginning of the year.