Crude oil prices climbed higher on Thursday, rebounding from recent losses, after data showed gasoline and distillate stockpiles dropped in the week ended December 30th.
Crude inventories in the U.S., however, rose by 1.7 million barrels last week, as against an expected increase of 1.2 million barrels, data from Energy Information Administration (EIA) showed.
West Texas Intermediate Crude oil futures for February ended higher by $0.83 or about 1.1% at $73.67 a barrel.
WTI Oil futures shed about 9% in the first two session of the new year, the biggest two-day drop at the start of a year in about three decades.
Brent crude futures were up $0.94 or 1.2% at $78.78 a barrel a little while ago.
The EIA data showed gasoline stocks in the U.S. dropped by 346,000 barrels last week, compared with an expected drop of 486,000 barrels.
Meanwhile, distillate stockpiles fell 1.4 million barrels in the week, as against expectations for a drop of 396,000 barrels.
Edward Moya, Senior Market Analyst at OANDA, said, “Oil is trying to rally but demand concerns are keeping the gains small. The Saudis are slashing prices as the short-term crude demand outlook seems like it won’t quite get a major boost from a robust China reopening.”
“It’s been a few decades since oil had this bad of a start [to a new year] and energy traders jumped all over the news that the Colonial Pipeline had to halt operations after a leak occurred,” Moya said. “The shutdown should be over on Saturday, but the unexpected disruption helped oil prices stabilize,” he added.