Oil rises on US crude storage draw, China imports up

FILE PHOTO: A drone view of three berths able to load vessels with oil is seen after their construction at Westridge Marine Terminal, the terminus of the Canadian government-owned Trans Mountain pipeline expansion project in Burnaby, British Columbia, Canada, April 26, 2024. REUTERS/Chris Helgren/File Photo

By Emily Chow

LONDON (Reuters) -Oil prices rose on Thursday as falling U.S. crude inventories amid rising refinery intake and a rise in Chinese imports last month supported higher demand expectations for the world’s two largest crude consuming nations.

Brent crude futures for July rose 64 cents, or 0.8%, to $84.22 a barrel by 0812 GMT. U.S. West Texas Intermediate crude for June was up 66 cents, or 0.8% to $79.65 per barrel.

“Oil markets were buoyed by a larger-than-expected draw in the U.S. inventory data. The improved China’s trade balance data added to the upside momentum,” said Tina Teng, an independent market analyst, adding that crude prices may continue to track economic factors looking ahead.

Crude inventories in the U.S., the world’s biggest oil user, fell last week by 1.4 million barrels to 459.5 million, according to the Energy Information Administration, more than analysts’ expectations for a 1.1 million-barrel draw. Stockpiles fell as refinery activity increased by 307,000 barrels per day (bpd) in the period. [EIA/S] [API/S]

This caused gasoline stocks to swell by more than 900,000 barrels to 228 million, while distillate stockpiles including diesel and heating oil rose by 600,000 barrels to 116.4 million.

“The market shrugged off the builds in gasoline and distillate fuels as refiners ramp up for the upcoming driving season,” analysts at ANZ Research wrote in a note on Thursday.

Shipments of crude in April to China, the world’s biggest oil importer, totalled 44.72 million metric tons, or about 10.88 million bpd, customs data released on Thursday showed. That was up 5.45% from a year earlier.

Hopes for a ceasefire in the Israel-Hamas conflict Gaza kept oil prices from moving higher. The U.S. said this week that negotiations should be able to close the gaps between Israel and Hamas.

“While there may be some short-term relief for oil prices, it may be difficult to return to April’s high above the $90 per barrel level, where geopolitical tensions were at its peak,” said Yeap Jun Rong, market strategist at IG.

(Reporting by Paul Carsten in London, Laila Kearney in New York and Emily Chow in Singapore; editing by Christian Schmollinger and Jason Neely)