Oil rose on Thursday, recouping some of the heavy losses in the previous session, supported by easing trade tensions between Washington and Beijing and a drop in U.S. crude stockpiles to the lowest in nearly a year.
Brent crude futures rose 45 cents, or 0.7 percent, to $61.26 a barrel by 0504 GMT, while U.S. West Texas Intermediate (WTI) futures gained 50 cents, or 0.9 percent, to $56.25 a barrel.
The rise came after China moved to exempt some U.S. anti-cancer drugs and other goods from tariffs, while President Donald Trump announced a delay to scheduled tariff hikes on billions of dollars’ worth of Chinese goods.
The concessions also preceded a planned meeting in coming days aimed at defusing the long-running trade row between the world’s two largest economies.
“The postponement of the next round of China tariffs by President Trump … has the global growth story back in full swing,” said Jeffrey Halley, senior market analyst at OANDA.
That said, “further rallies in Asia look limited today” ahead of the European Central Bank (ECB) rate review.
The ECB meets later on Thursday and is expected to ease policy to support flagging growth.
The price upswing on Thursday came after both of the principal global benchmarks fell sharply in the previous day following a report that President Trump had weighed easing sanctions on Iran, a move that would potentially boost global crude supply at a time of rising concerns about oil demand.
Boosting the market’s good mood, the U.S. Energy Information Administration said on Wednesday that U.S. crude oil stockpiles fell last week to the lowest in nearly a year, as refineries raised output and imports fell.
“Historical inventory patterns suggest that stocks should begin to hit seasonal bottom sometime in the next two-three weeks,” said Stephen Innes, Asia Pacific market strategist at AxiTrader.
Crude inventories fell for a fourth straight week, decreasing 6.9 million barrels in the week to September 6 – more than double analysts’ expectations of a 2.7 million-barrel draw down.
At 416.1 million barrels, U.S. crude oil inventories were at their lowest since October 2018, and about 2 percent below the five-year average for this time of year, the EIA said.
Crude stocks at the Cushing, Oklahoma, delivery hub fell 798,000 barrels to 39.3 million barrels, their lowest since November 2018.
Refinery crude runs rose by 114,000 bpd, EIA data showed.
Refinery utilization rates rose by 0.3 percentage point to 95.1 percent of total capacity.
Source: Reuters
