Oil prices are stable in trading on Thursday after a strong growth in the previous session, despite an unexpected increase in inventories in the USA.
The market is supported by the growing optimism of traders about the prospects for fuel demand in China. As noted by Bloomberg, Chinese companies are actively buying oil before the long holiday on the occasion of the Lunar New Year, which this time comes at the end of January.
“Investors are more focused on the global demand picture than energy stock data,” notes Tortoise portfolio manager Brian Kessens. – The focus is on China, which is likely to be the main driver of oil consumption growth in the first quarter.”
The cost of March futures on Brent on London stock exchange ICE Futures is $82,7 per barrel by 7:10 a.m. KSC on Thursday which is by $0,03 (0,04%) higher than the price on previous session closing. At the close of trading on Wednesday those contracts rose by $2.57 (3.2%) to $82.67 a barrel.
The price of WTI futures for February increased by $0.02 (0.03%) up to $77.43 per barrel at electronic trades of NYMEX. By the close of previous trading the cost of those contracts rose by $2.29 (3.1%) to $77.41 a barrel.
U.S. commercial oil inventories rose 18.96 million barrels to 439.61 million barrels last week, the Energy Department said Wednesday. Experts polled by Bloomberg agency expected on average a decrease of 2 million barrels, respondents of S&P Global Commodity Insights – by 500,000 barrels.
The increase in oil inventories is probably due to a temporary reduction in production by U.S. refineries at the end of last month due to frost, notes Market Watch. The current inventory level is about 1% higher than the five-year average.
