In a notable uptick, oil prices experienced a 1% climb to reach a four-week high on Wednesday, propelled by several key factors including a larger-than-anticipated U.S. crude storage withdrawal, a decline in U.S. crude output, Chinese economic stimulus, geopolitical tensions, and a softened U.S. dollar.
Brent futures saw a significant increase of $1.03, equivalent to 1.3%, settling at $80.58 per barrel by 12:03 p.m. EST (1703 GMT). Simultaneously, U.S. West Texas Intermediate (WTI) crude observed a rise of $1.31, or 1.8%, reaching $75.68.
Brent is poised for its highest settlement since December 26, while WTI is on track for its highest since November 30. In parallel, U.S. diesel and gasoline futures are heading towards their most elevated closures in weeks.
Contributing to the global market dynamics, China’s central bank is set to reduce the reserve requirements for banks starting from February 5, a strategic move anticipated to reinforce a delicate economic recovery.
Further amplifying the positive market sentiment, the U.S. Energy Information Administration (EIA) reported a substantial withdrawal of 9.2 million barrels of crude from stockpiles during the week ending January 19. This figure surpassed expectations, exceeding the forecasted 2.2-million barrel draw predicted by analysts in a Reuters poll and underscoring the robust demand for oil in the current economic landscape.
