Crude oil prices rose sharply on Wednesday, extending gains to an eighth successive session, amid easing concerns about energy demand and on data showing a drop in U.S. crude inventories.
Worries about energy demand have eased a bit following the high level trade discussions between U.S. and Chinese officials. It is now being speculated that the two nations will strike a trade deal ahead of a March 1 deadline established by U.S. President Donald Trump and Chinese President Xi Jinping last month at the G20 summit in Argentina.
Data released by the Energy Information Administration today showed crude oil inventories dropped by 1.68 million barrels in the week to January 4, after falling by about 1.4 million barrels a week earlier. However, the drop was notably less than forecasts.
Gasoline inventories were up by 8.07 million barrels last week, while distillate stockpiles increased by 10.61 million barrels.
Crude oil futures for February ended up $2.58, or 5.2%, at $52.36 a barrel.
On Tuesday, crude oil futures ended up $1.26, or 2.6%, at $49.78 a barrel.
Saudi Arabia's energy minister is reported to have expressed confidence that action to rein in output by OPEC and its allies would bring the oil market into balance, unless there was an unexpected development.
Khalid al-Falih also said he would not rule out calling for further action by the Organization of the Petroleum Exporting Countries and its allies in future, adding that market conditions looked better than a few weeks ago.
UAE Energy Minister Suhail Al Mazroui has also stated that a global oil pact to cut production by 1.2 million barrels per day is enough to balance the oil market.
Investors shrugged off a World Bank report suggesting that global growth will drop to 2.9% this year from 3% in 2018 on the back of several downside risks.
"The outlook for the global economy has darkened. Global financing conditions have tightened, industrial production has moderated, trade tensions have intensified, and some large emerging market and developing economies have experienced significant financial market stress," the bank said.
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