By Shariq Khan
BENGALURU (Reuters) – Oil prices rose by more than a dollar per barrel on Thursday, resuming a recent rally built around rising Chinese demand, while the market wrote off a second straight week of large builds in U.S. crude inventories.
Brent crude futures were up $1.26, or 1.5%, to $86.24 a barrel at 1:20 p.m. EST (1820 GMT), and U.S. West Texas Intermediate (WTI) crude had risen $1.05, or 1.3%, to $80.53 a barrel. Both benchmarks hit their highest prices in more than a month on Tuesday.
Chinese oil demand climbed by nearly 1 million barrels per day (bpd) from the previous month to 15.41 million bpd in November, the highest level since February, according to the latest export figures published by the Joint Organisations Data Initiative.
Energy markets could be tighter in 2023, especially if the Chinese economy rebounds and the Russian oil industry struggles under sanctions, International Energy Agency (IEA) head Fatih Birol said on Thursday.
Oil prices were down by more than a dollar per barrel earlier in Thursday’s session, as traders booked profits and U.S. data showed the economy losing momentum.
Prices also came under pressure after U.S. Energy Information Administration (EIA) data showed U.S. crude stocks last week rose by 8.4 million barrels, their biggest gain since June 2021.
UBS analyst Giovanni Staunovo described the EIA data as a “bearish report, with large crude and gasoline inventory increases, but an improvement from last week, with a recovery of implied oil demand and refinery runs from the impact of Storm Elliot.”
U.S. gasoline refining margins traded at a new five-month high for the fourth straight session on Thursday, amid optimism about rising travel demand from China’s reopening and threats to refined products supply from strikes in France.
“Gasoline demand was up big for winter,” said Mizuho analyst Robert Yawger. “It was warm in much of the country, so people were driving around much more than they were. People are getting out instead of hiding indoors.”
(Reporting by Shariq Khan, additional reporting by Noah Browning, Ahmad Ghaddar, Sonali Paul and Emily Chow; Editing by David Goodman, Elaine Hardcastle and Paul Simao)
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