A combination of factors boosting market optimism caused crude oil prices to close 0.28% higher at 6399. The market was infused with liquidity and hopes of an economic revival were reinforced by China’s recent stimulus announcements, especially the lowering of the reserve requirement for banks. One of the main factors driving the rising demand for crude oil is this predicted rebound.
The stronger-than-anticipated inventory draw in the United States added to the positive mood. The U.S. Energy Information Administration’s official statistics for the week ending January 19 showed a notable drop in crude oil stockpiles of 9.2 million barrels, above market estimates of a 2.2 million barrel reduction. The American Petroleum Institute claimed that there was a 2.5 million barrel decline the week prior to the unanticipated draw.
The International Energy Agency has responded proactively to changing market conditions by moving up the release date of its first estimate of oil demand for 2025 by two or three months, to April. The industry’s commitment on responding to changing conditions is evident in this step, which is in line with OPEC’s decision to advance its forecast by six months.
