Investing.com– Oil prices were higher in Asian Trade on Thursday after data showed that U.S. oil inventories declined last week, while traders were cautious as they mulled over the outlook for the new year.

At 20:39 ET (01:39 GMT), Brent Oil Futures rose 0.7% to $75.13 a barrel, and Crude Oil WTI Futures expiring in February jumped 0.7% to $71.75 a barrel.

Oil posted a moderate yearly loss in 2024, and traders entered 2025 with a cautious stance as they brace for an oversupplied market this year.

API reports fall in US oil inventories

The American Petroleum Institute reported on Tuesday that U.S. oil inventories fell by 1.4 million barrels last week.

A drop in U.S. oil inventories indicates an increase in demand for crude oil, which can be good for crude prices. When inventories decrease, traders may buy back into the oil market, which can drive up prices.

The U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy will release its weekly data later on Thursday.

Traders will be waiting to see if the official inventory report confirms the decline. These official figures provide insights into the supply and demand dynamics of the U.S. crude oil market, influencing pricing and economic decisions.

Oil market braces for an oversupply in 2025

Despite the fall in inventories, the latest EIA data has shown that U.S. oil production remains near record levels, and the incoming Donald Trump administration is likely to agree to policies that would focus on ramping up domestic fossil fuel production.