Crude prices advanced to its highest level on Wednesday after China released its upbeat trade data for January and reports showed distillate stockpiles dropped last week in the US, the world’s biggest oil consumer.
WTI for March delivery rose 0.55% higher to trade at $100.49 per barrel on the New York Mercantile Exchange at the time of writing. While the European benchmark Brent crude for March settlement gained 0.09% to $108.78 per barrel on the ICE Futures Europe exchange.
The continuous four-week gain in the North American crude was primarily driven by the extreme cold weather in the US, increasing the demand for energy.
Crude Inventories
According to reports from the American Petroleum Institute (API), crude oil inventories added 2.13 million barrels in the last week. The reports also revealed gasoline inventories declined by 479,000 barrels, compared to the forecast of a 100,000 barrel drop.
According to the Energy Information Administration (EIA), the extreme winter weather in the US could curb the rise in oil production as the low temperatures limit drilling of new oil wells.
The EIA are expected to release reports for its oil stockpiles later in the day.
China Trade Balance
China’s trade balance expanded in January, while the country’s imports and export growth surpassed predictions.
The surplus on trade came in at $31.9 billion in January, widening from the previous figure of $25.6 billion seen in the previous month and exceeding analysts’ forecast of a $23.6 million surplus, a release from the Customs General Administration of China confirmed.
While Import growth rose to 10%, compared to 8.3% growth seen in December. Exports growth exceeded analysts expectations, rising 10.6% year-on-year in January.
Yellen Testimony
The Federal Reserve’s (Fed) new Chairwoman Janet Yellen made her first speech before congress on Tuesday in which she hinted the Fed will go ahead with its target to slowly reduce its easing policy regardless of the recent weak jobs data.
“The economic recovery gained greater traction in the second half of last year,” according to Yellen.
“If incoming information broadly supports the Committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings,” according to Fed Chair Yellen.
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