2020.01.1619:16:00UTC+00Oil Futures Rebound From 6-week Lows, Settle Notably Higher

Crude oil futures settled notably higher on Thursday, rebounding sharply from losses in the previous session, thanks to a drop in U.S. crude inventories and the signing of a partial U.S.-China trade deal.

The U.S.-China trade deal and some upbeat economic data have raised hopes about an increase in near-term energy demand.

Oil prices were weak early on in the session due to a report from the International Energy Agency (IEA) that said it expects oil production to outpace demand for crude from OPEC despite full compliance with a pact that calls for a deep output reduction.

The IEA report also said higher oil production from non-OPEC countries, including the U.S., and huge stockpiles will offset disruptions that might happen due to geopolitical tensions.

West Texas Intermediate crude oil futures for February ended up $0.71, or about 1.2%, at $58.52 a barrel.

On Wednesday, WTI Crude oil futures for February ended down $$0.42, or 0.7%, at $57.81 a barrel, the lowest settlement price since early December 2019.

According to the data released by the Energy Information Administration (EIA) on Wednesday, crude stockpiles in the U.S. fell by 2.55 million barrels in the week ended Jan. 10, substantially higher than an expected drop of about 474,000 barrels.

A report from the Labor Department showed initial jobless claims in the U.S. fell to 204,000 in the week ended January 11th, a decrease of 10,000 from the previous week's unrevised level of 214,000. The drop came as a surprise to economists, who had expected jobless claims to inch up to 216,000.

According to a report from the Commerce Department, retail sales in the U.S. climbed by 0.3% in December, matching the upwardly revised increase in November. Economists had expected retail sales to rise by 0.3% compared to the 0.2% uptick originally reported for the previous month.

The Philadelphia Federal Reserve also released a report showing a substantial acceleration in the pace of growth in regional manufacturing activity in the month of January.