NEW YORK CITY – Oil prices increased for the first time in eight sessions on Wednesday as a draw in weekly US crude oil inventories and positive Chinese trade data gave investors reasons to buy crude futures, according to a Reuters report.
Brent crude was up 90 cents, nearly 3%, at $31.76/bbl. US West Texas Intermediate crude was up 98 cents at $31.42/bbl, recovering from Tuesday’s dip below $30.
“The API inventory data triggered a profit-taking wave, that’s the main reason for this uptick,” Hans van Cleef, senior energy economist at ABN Amro in Amsterdam, was quoted as saying. “But the overall sentiment is still negative, meaning downside risk is still greater than upside potential.”
US crude stocks fell unexpectedly last week, data from industry group the American Petroleum Institute showed on Tuesday.
Crude inventories fell by 3.9 MMbbl in the week to 480.071 MMbbl, compared with analysts' expectations for an increase of 2.5 MMbbl. Crude stocks at the Cushing, Oklahoma delivery hub fell by 302,000 bbl, the API said.
China reported exports dipped just 1.4% in US dollar terms in December, compared to forecasts of an 8% drop, positively surprising world markets, according to the report.
The world’s second-biggest oil consumer has also been taking advantage of the oil price rout to stock reserves and increase exports of refined products, and may be set to overtake the US as the world’s largest importer.
But the bearish outlook for oil remains. Analysts at Morgan Stanley warned on Wednesday that a rise in demand for crude could be lower than previously expected, according to the report.
“Any slowing in the rate of demand growth could delay the timing of rebalancing and ultimately a price recovery,” the analysts were quoted to have said in a research note.