The price of oil rose by about 0.5%, helped by the weakening of the US dollar, as well as China's latest measures aimed at stimulating the economy. Investors are also preparing for the publication of weekly data on oil reserves in the United States.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.48% to 103.12.
Earlier this week, the media reported that Chinese authorities are preparing a package of measures worth $278 billion to stabilize the slumping stock market. Today, the Central Bank of China announced that from February 5 it would reduce the amount of cash that banks must keep as reserves.
The reserve requirement ratio (RRR) for all banks will be reduced by 50 basis points, which would free up 1 trillion yuan to the market. This is the largest such reduction since December 2021.
Meanwhile, the American Petroleum Institute reported that U.S. oil inventories declined by almost 7 million barrels last week, including a drop at the key hub at Cushing, Oklahoma. However, gasoline inventories increased by 7.2 million barrels, increasing concerns about fuel demand from the world's largest oil consumer. Later today (at 15:30 GMT), official data from the Energy Information Administration will be published. Economists expect oil inventories to fall by 2.15 million barrels after a decline of 2.492 million barrels a week earlier.
“The impact of geopolitical risks on oil prices has so far been limited. If the usual seasonal increase in demand weakens the bearish consensus, we expect that geopolitics will have a stronger impact on prices,” Standard Chartered analysts said.