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WTI Crude Oil Trades Steady as EIA Reports Drawdown in Stockpiles

WTI Crude Oil Trades Steady as EIA Reports Drawdown in Stockpiles

Posted Thursday, January 14, 2021 by
Arslan Butt • 1 min read

WTI crude oil is trading somewhat steady but enjoys support from the larger than expected drawdown in US crude inventories reported by the EIA during the previous session. At the time of writing, WTI crude oil is trading at around $52.79 per barrel.

The EIA report which released on Wednesday revealed that crude inventories in the US declined by 3.2 million barrels to 482.2 million barrels during the past week. The figure revealed a bigger drop than economists’ forecast, which was for a drawdown of 2.3 million barrels instead, and strengthened hopes among traders that oil demand was picking up despite the pandemic.

Crude oil prices are also strengthening over reports that China increased its crude oil imports by 7.3% for 2020 despite the coronavirus crisis. The steep drop in oil prices and expanding refineries spurred China’s crude imports, especially during Q2 and Q3 last year.

However, gains in oil prices remain limited over persistent fears about the rise in fresh coronavirus infections driving more restrictions around the world. Despite Saudi Arabia committing to deeper supply cuts, analysts expect it to take several months before oil demand picks up and for the markets to achieve a balance between supply and demand.

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