WTI crude oil is trading bullish early on Wednesday, with markets turning optimistic over the API report which revealed a surprising decline in US crude inventories over the past week and China reported a smaller number of fresh coronavirus cases. At the time of writing, WTI crude oil is trading at around $52.78 per barrel.

During the previous session, the API reported a 5.3 million barrel fall in crude stockpiles in the US. The data went against economists’ expectations, which was for a build in inventories by 430k barrels instead, and raised traders’ hopes for an improvement in oil demand.

Crude oil prices were further bolstered in early trading after China confirmed the smallest daily increase in the number of new cases, giving traders hopes that the world’s second largest consumer had successfully contained the latest outbreak effectively once again. This has oil markets hopeful that the country would ease restrictions that prevented consumers from traveling during the upcoming Chinese New Year holidays.

In addition, China also reported a pick-up in industrial profits for the eighth consecutive month during December, supporting hopes for economic recovery. Profits of industrial firms in China increased by 20.1% YoY during December, improving from the 15.5% rise seen in the previous month.