2024.01.1819:11:00UTC+00Oil Settles Sharply Higher On Drop In Crude Stocks, Bullish Demand Forecast

Oil prices climbed higher on Thursday, lifted by data showing a drop in U.S. crude inventories in the week ended January 12th, and on higher forecasts for global oil demand.

Recent strong U.S. economic data also point to a likely jump in oil demand. Meanwhile, tensions in the Middle East continue to disrupt global shipping and trade.

Data from U.S. Energy Information Administration (EIA) showed crude inventories dropped by 2.5 million barrels last week, as against expectations for a declined of 313,000 barrels.

Gasoline inventories increased by 3.1 million barrels last week, higher than an expected increase of 2.2 million barrels, while distillate stocks were up 2.4 million barrels in the week, more than 2.5 times the expected increase.

West Texas Intermediate Crude oil futures for February ended higher by $1.52 at $74.08 a barrel.

Brent crude futures were up $1.20 or 1.53% at $79.08 a barrel a little while ago.

The International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC), both said in their reports that global oil demand will see a significant growth this year.

The IEA said in its montly report that oil demand will likely grow by 1.24 million barrels per day in 2024, up 180,000 barrels per day from its earlier projection.

The OPEC said in its report on Wednesday that it expects demand to rise by 2.25 million barrels per day this year, and by 1.85 million barrels per day to 106.21 millon barrels per day in 2025.