Oil prices rose on Thursday, fuelled by a larger-than-expected drop in US crude stocks and as China, the world's largest importer, announced additional stimulus measures.
Brent, the benchmark for two thirds of the world’s oil, was trading 1.32 per cent higher at $81.10 a barrel at 3.46pm UAE time.
West Texas Intermediate, the gauge that tracks US crude, was up 1.45 per cent at $76.18 a barrel.
US crude inventories, an indicator of fuel demand, decreased by 9.2 million barrels in the week that ended on January 19, the US Energy Information Administration said.
Analysts polled by Reuters were expecting a drop of 2.2 million barrels.
“Geopolitical risk and the threat of delays and disruption are causing some alarm but that's not being particularly reflected in the price at this stage,” said Craig Erlam, senior market analyst at Oanda.
“That the market is pulling back less and less in recent weeks could be indicative of traders becoming more apprehensive."
On Wednesday, China's central bank announced a deep cut in bank reserves to release more liquidity to bolster stock valuations.
The move is expected to inject an additional trillion yuan ($140 billion) into the country’s banking system.
China’s post-pandemic economic recovery has fallen short of expectations thanks to a domestic property slump, weak manufacturing and reduced consumer spending.
“The Chinese are serious about bolstering their economy and they look like they are getting to a place where they are ready to do whatever it takes to reverse the slowing trend,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“Will it help? Well, we will see. The good news is, if it doesn’t, the Chinese will continue until it does."
China’s crude imports hit a new high last year, gaining nearly 11 per cent year-on-year to reach 563.99 million metric tonnes, or 11.28 million barrels per day, official data indicated.
Last week, Opec forecast a decline in crude oil demand growth in 2025 but said fuel consumption would be driven by solid economic activity in China.
Global oil demand is expected to grow by 1.8 million bpd next year, down from Opec's estimate for this year of 2.2 million bpd, the group said in its monthly oil market report.
