WTI crude oil gained 1.27% to settle at $78.39 in today’s session. The optimistic outlook regarding oil resulted from hopes of an uptick in demand from China. Traders are also hopeful that the Federal Reserve will increase interest rates at a slower pace as inflation data continues to cool.
China is a top oil importer, and with its economy reopening after the lifting of strict COVID-19 curbs, demand is likely to pick up.
Moreover, the latest numbers from the U.S. Energy Information Administration (EIA) indicated that in the first week of this year, the U.S. added 19 million barrels of crude oil to its stockpile versus a consensus estimate of a decline of 2.2 million barrels. This was the third-largest weekly rise since 1982.
Oil markets could be poised for an exciting ride this year with production increasing in the U.S., OPEC sticking to its 2 million barrels a day production cut, and demand from China expected to see an uptick in the coming periods.
Meanwhile, natural gas gained 0.7% to close at $3.695 today.
The Energy Select Sector SPDR ETF (XLE) has now gained about 4.7% over the last five sessions, while Exxon is up about 3.6%.
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