Oil reversed some of its earlier declines after a boost in investor confidence driven by rising Chinese demand and a reported build in U.S. stockpiles.
According to a report by the American Petroleum Institute, crude inventories surged by 14.9 million barrels last week. If confirmed by government figures, this will be the largest crude inventory rise since February 2021.
West Texas Intermediate gained 0.8%, thereby backtracking from its 1.1% fall in the previous session. While subjected to a loss of almost 10% during the first two sessions of the year, the outlook for oil does appear to be improving as a result of China’s rising oil use. Chinese major Unipec purchased US Mars crude with delivery expected to take place in March or April, while another Chinese firm also placed an order for American oil.
In an effort to gauge the direction of the oil market, traders are looking toward U.S. monetary policy going forward. JPMorgan Chase & Co.’s Chief Executive Officer Jamie Dimon stated that interest rates may have to move above 5% in an effort to continue to battle against rising inflation.