FRANKFURT—Oil futures rose marginally on Thursday, as data showing strong growth in China's economy and news of falling petroleum inventories boosted sentiment in the energy market.
Crude oil for March delivery gained 15 cents to $77.89 a barrel in electronic trading on the Globex electronic-trading system. The contract earlier hit an intraday high of $78.20 a barrel.
China's economy expanded 8.7% in 2009, as a huge fiscal stimulus and bank lending helped the economy escape recession, according to official data released on Thursday. For the fourth quarter, gross domestic product grew 10.7% from a year earlier.
"Both robust economic data from China and API inventory data, which was released after close of trading [on Wednesday], lent support to the oil price," said analysts at Commerzbank AG.
Crude inventories declined by 1.8 million barrels for the week ended Jan. 15, the American Petroleum Institute reported late Tuesday. In contrast, analysts expected an increase of 2.8 million barrels, according to a Platts survey.
Distillate supplies dropped by 3.39 million barrels last week, while gasoline stocks rose 667,000 barrels, the API also said.
Analysts polled by Platts expected an increase of 2.1 million barrels in gasoline stockpiles and a build of 1.1 million barrels in distillate stocks.
The Energy Information Administration will release its more closely watched report on petroleum inventories at 11 a.m. on Thursday, a day later than usual because of the Martin Luther King Jr. Day holiday.
Crude futures slumped 1.8% on Wednesday, pressured by concerns tighter lending measures in China may curb energy demand.
"We've been correcting obviously after the advance above $80," said Harry Tchilinguirian, senior oil analyst at BNP Paribas Commodity Derivatives in London.
"That advance was prompted by cold temperatures. [But] the fundamentals in the oil market still remain weak given high inventories," he said.
The decline in crude inventories reported by the API was unusual given a decline in refinery runs, so the market is still looking for the EIA to report a buildup in crude supplies, Mr. Tchilinguirian said.
Refinery utilization declined to 77.3% lof capacity last week from 79.8% previously, according to API data.
Energy traders are also watching the U.S. dollar, which continued to strengthen.
Dollar strength typically pressures dollar-denominated commodities such as oil because it makes them more expensive for holders of other currencies.
"As the dollar strengthens, this adds an additional dimension to the correction we're having [in oil prices]," Mr. Tchilinguirian said.
The Organization of Petroleum Exporting Countries cartel is producing more oil, the cold weather is abating, the dollar is strengthening and there are issues about China's inflation, he said.
These factors have "combined to give the bearish direction to prices," Mr. Tchilinguirian said. Over the next six months, he expects a wide trading range for oil prices centered around $75 a barrel, with any advance above $80 a barrel difficult to sustain.
