Oil Prices Rise On US GDP…

 

Oil prices are rising following the release of better-than-expected GDP growth for the fourth quarter of last year. This increase comes after crude oil prices surged amid severe winter storms that halted domestic production.

Oil prices were up more than 2%, reaching as much as 3% for WTI, breaking above the resistance of $75 a barrel and even surpassing $77 a barrel. Additionally, Brent crude experienced an increase of more than 2.5%, reaching above $82 a barrel. There are some bullish developments, as you mentioned, with the GDP print for the 4th quarter in the US surpassing expectations.

China has also implemented stimulative measures for banks, reducing the required liquidity on hand. Cold winter weather has further impacted US production, with last week’s production down by a million barrels, particularly affecting North Dakota due to freezing temperatures. Furthermore, stockpiles dropped significantly, with crude inventories down more than 9 million barrels, exceeding analysts’ expectations.

Gasoline supplies, however, increased by nearly 5 million barrels, reaching a three-year high, which is bearish for oil prices. Nevertheless, the freezing temperatures have had a notable impact on US production and refineries, with refinery capacity at 85.5% last week according to EIA data.

These factors, combined with Houthi attacks in the Red Sea, contribute to the overall impact on oil prices. Looking ahead, keep in mind the upcoming OPEC Plus meeting scheduled for February 1st, which may introduce further developments in the oil market. Thank you for the detailed analysis.

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