WASHINGTON (dpa-AFX) - Oil futures settled higher on Thursday amid some hopes about the outlook for oil demand from the world's second largest economy and data showing a drop in crude inventories in the U.S. in the week ended December 27th.
West Texas Intermediate Crude oil futures settled higher by $1.41 or about 2% at $73.13 a barrel.
Brent crude futures closed up $1.29 or 1.7% at $75.93 a barrel.
Optimism about China's oil demand has increased following President Xi Jinping's remarks that China would implement more proactive policies to promote growth this year.
China's economy was 'overall stable and progressing amid stability,' Xi said at a new year event on Tuesday, according to a speech published by the official Xinhua News Agency.
Reaffirming the official GDP target of around 5% for the full year of 2024, Xi sought to allay fears that the world's second-largest economy would falter over the next 12 months in the face of some new situations, challenges from the uncertainty of the external environment and pressure of transformation from old drivers of growth into new ones.
Data from the Energy Information Administration (EIA) said crude oil inventories decreased by 1.2 million barrels last week after tumbling by 4.2 million barrels in the previous week. Economists had expected crude oil inventories to slump by 2.8 million barrels.
At 415.6 million barrels, U.S. crude oil inventories are about 5% below the five-year average for this time of year, the EIA said.
Meanwhile, the report said gasoline inventories surged by 7.7 million barrels last week and are only slightly below the five-year average for this time of year.
The EIA said distillate fuel inventories, which include heating oil and diesel, also jumped by 6.4 million barrels last week but are about 6% below the five-year average for this time of year.
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