© Reuters.
Investing.com — Oil prices rose Thursday, boosted by signs of U.S. economic strength, on top of stimulus measures from top importer China and a larger-than-expected drop in U.S. inventories.
By 09:30 ET (14.30 GMT), the futures traded 1.8% higher at $76.47 a barrel and the contract climbed 1.6% to $81.34 a barrel.
U.S. economy grows more than expected
The U.S. economy grew at a faster than anticipated rate in the fourth quarter, according to data released earlier Thursday, providing the crude market with support as activity remained robust in the largest energy consumer in the world.
in the world’s largest economy expanded at an annual rate of 3.3% in the fourth quarter. Although this represented a drop from the 4.9% growth seen in the prior three-month period, this was still considerably above the predicted mark of 2.0%.
U.S. inventories, Chinese stimulus add support
This sign of economic resilience in the U.S. added support to a market that was already trending higher after Wednesday’s release of official U.S. inventories data, which showed that U.S. crude stockpiles tumbled by a hefty 9.2 million barrels last week.
The official data from the was impacted by the harsh winter weather, which shut in refineries and kept motorists off the road.
U.S. crude output fell from a record 13.3 million barrels per day two weeks ago to a five-month low of 12.3 barrels per day last week.
Also boosting the crude market was the news that the People’s Bank of China on Wednesday unexpectedly cut reserve requirements for local banks, freeing up more liquidity in another attempt to foster economic growth in the world’s largest oil importer.
Tensions also remain raised in the Middle East, as the war between Israel and Hamas in Gaza rages on and Iran-backed Houthi militants continue to threaten shipping in the Red Sea, a crucial artery for shipping between Europe and Asia.
Inflation data now in spotlight
Attention now turns to Friday’s release of U.S. data, the Fed’s preferred inflation gauge, which is expected to show that inflation remained sticky in December.
The reading comes just days before the Fed’s first meeting of 2024, where the central bank is widely expected to keep rates at 23-year highs.
Fears of softening demand, amid easing economic growth and high interest rates, were a key point of concern for oil markets through 2023, limiting gains from any supply reductions.
(Ambar Warrick contributed to this article.)
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