Brent ended up 3.20% at $82.67 and WTI ended up 3.04% at 77.41%.
Oil prices rose strongly on Wednesday, still driven by the prospect of China opening up to increase demand for black gold, and despite a massive increase in US crude inventories.
A barrel of Brent North Sea oil for March delivery jumped 3.20% to $82.67.
Its US equivalent, a barrel of West Texas Intermediate (WTI) for February delivery, gained 3.04% to 77.41%.
The rise in prices was driven by “continued expectations that China will recover,” Bart Melek of TD Securities told AFP, adding that several banks had raised their price targets for a barrel of crude.
“We estimate that we might see in six to nine months regarding a million, even a million and a half barrels of new demand from China,” noted the analyst from TD Securities.
China has reopened its border with Hong Kong since Sunday, and ended the mandatory quarantine for travelers from abroad, which should revive mobility in and outside the country.
A large number of trips is particularly expected in the run-up to the Chinese New Year at the end of January, which might also boost demand and push up prices.
To this were added unexpected figures on the side of weekly stocks of American crude oil and especially on the side of their strategic reserves.
Inventories increased massively in a surprise way with an additional 19 million barrels, an exceptional increase due to the interruptions of activity of the refineries in recent weeks due to a winter storm at the end of December.
Inventory buildup of this order usually tends to have a downward influence on prices, which has not materialized.
Brokers were indeed also surprised by the halt in the use of strategic reserves by the US administration.
For a year and a half, the Biden government has drawn heavily on these strategic reserves, putting more than 200 million barrels on the market.
These exceptional measures had been taken to bring down crude oil prices by expanding supply, in order to counteract inflation and hydrocarbon supply disruptions due to the war in Ukraine.
But on Wednesday, weekly data from the U.S. Energy Information Agency (EIA) showed the Biden administration put a severe damper on that drain on strategic reserves, withdrawing just 800,000 barrels. once morest several million each week for months.
“Sales of strategic reserves helped fill the supply gap last year but now refiners are looking for an alternative supply. This is a contributing factor to the rise in prices, with the opening of China, “said Andy Lipow of Lipow Oil Associates.
According to him, stopping the use of strategic reserves might be worth 5 to 7 dollars more per barrel.
