Oil prices extended their rally on Thursday, driven by declining U.S. crude inventories that signaled tightening supply, despite lingering concerns over China’s sluggish economic recovery. West Texas Intermediate (WTI) rose 1.2%, reaching $88.45 a barrel, while Brent crude climbed to $91.15, supported by signs of robust demand in the U.S. and a weaker dollar boosting purchasing power for buyers holding other currencies.
The U.S. Energy Information Administration reported a 5.6 million-barrel drop in crude inventories last week, well above market expectations. Falling stockpiles highlight strong domestic consumption, further fueled by seasonal refinery runs. Analysts noted that supply-side constraints, including production cuts by OPEC+ members like Saudi Arabia, continue to outweigh concerns about China’s faltering economy, which is struggling to rebound from pandemic disruptions.
While China’s weak industrial output and property market remain a drag on global sentiment, the focus on supply risks has kept oil prices buoyant. Traders are also eyeing upcoming OPEC+ meetings for indications of future policy adjustments, with any signs of extended cuts likely to sustain upward price pressure.
