WASHINGTON (dpa-AFX) - Oil futures settled higher on Wednesday on possible sanctions on Russia by the European Union, and expectations of increased demand from China. Data showing a jump in gasoline stockpiles, and possible disruptions in supply due to geopolitical tensions contributed as well to the rise in oil prices.
West Texas Intermediate crude oil futures for January closed up $1.70 or nearly 2.5% at $70.29 a barrel.
Brent crude futures settled at $73.52 a barrel, gaining $1.33 or 1.84%.
Data from the Energy Information Administration (EIA) showed crude oil inventories fell by 1.4 million barrels in the week ended December 6th, after tumbling by 5.1 million barrels in the previous week. Economists had expected crude oil inventories to dip by 1.1 million barrels.
At 422.0 million barrels, U.S. crude oil inventories are about 6% below the five-year average for this time of year, the EIA said.
Meanwhile, the report said gasoline inventories jumped by 5.1 million barrels last week but remain about 4% below the five-year average for this time of year.
Distillate fuel inventories, which include heating oil and diesel, also increased by by 3.2 million barrels last week but remain about 4% below the five-year average for this time of year, the EIA said.
Markets expect demand to rise in China after Beijing said it will implement a more proactive fiscal policy and follow a 'moderately loose' monetary policy next year - signaling the first easing of its stance in 14 years.
Also, Chinese President Xi Jinping said on Tuesday that China had full confidence in achieving this year's economic growth target.
On the geopolitical front, the Israeli military announced on Tuesday that it conducted approximately 480 airstrikes over the past 48 hours, targeting key military installations across Syria in the wake of President Bashar al-Assad's government collapse.
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