Oliver 16 0 0 4 min to read

The expected decline in US crude stocks has driven up oil prices.

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After reports showed that US crude stockpiles decreased more than expected, the price of oil increased on Wednesday as a result of an increase in demand.

As of 09.46 a.m. local time (0646 GMT), the price of international benchmark Brent crude was USD80.32 per barrel, up 0.41 percent from the previous trading session’s closing price of USD79.99 per barrel.

West Texas Intermediate (WTI), the American benchmark, was trading at USD76.44 a barrel at the same time, up 0.27 percent from the previous session’s closing price of USD76.23 per barrel.

In contrast to the market’s anticipation of a draw of 167,000 barrels, the American Petroleum Institute (API) released their estimate of a 3.06 million barrel decline in US crude oil stockpiles late on Tuesday.

A significant drop in inventory suggests an increase in US crude demand, allaying market fears about declining demand.

A recent increase in coronavirus cases in China, the second-largest oil consumer in the world, raised worries about the country’s economic recovery and restrained price hikes despite loosening pandemic restrictions.

In light of “recurrent Covid-19 outbreaks, the potential for further mobility restrictions, and precautionary behavior to halt the spread of the virus could contribute to a longer-than-expected disruption in economic activity,” the World Bank on Tuesday lowered China’s GDP prediction for both 2022 and 2023.

The bank’s December economic assessment predicts that the Chinese economy will expand by 2.7 percent this year. Prior projections called for growth of 2.8% in 2022.

Following a reopening of the economy, growth is anticipated to rebound to 4.3 percent next year, which has been downgraded from 4.5 percent in the bank’s previous forecast.

The US Energy Department on Friday stated it would repurchase oil to refill the nation’s Strategic Petroleum Reserve (SPR) after releasing 180 million barrels over many months to fend off rising energy prices, supporting price increases.

The government said that on January 13, bidding to fix rates for deliveries in February will begin.

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