Oil up 3% on global economic optimism
Russian crude output outweighs big surprise in US crude stocks
Brent rose $2.57, or 3.2%, to settle at $82.67 a barrel. west texas crude oil price US Intermediate (WTI) gained $2.29, or 3.1%, to settle at $77.41.
Both benchmarks settled at their highest levels since Dec. 30, with WTI rising for the fifth straight day for the first time since October. And Brent rose for a third consecutive day for the first time since December.
Global equities rose on hopes that Thursday’s US inflation and earnings numbers will indicate an economic recovery and slow rate hikes.
If inflation is lower than expected That will result in a weaker dollar. analyst said which will increase oil demand Because it makes crude oil cheaper for buyers holding other currencies.
The Federal Reserve is likely to raise interest rates target for last time On Jan. 31-Feb, one monetary policy meeting rose 50 basis points (bps) to 4.75%-5.00%, HSBC said in a research note.
Much of the market’s optimism has been pinned on major Chinese oil importers whose economy has reopened after the end of tight COVID-19 restrictions.
“Energy traders should get used to seeing oil prices go up. The demand for oil is coming back. And expectations are high that Chinese demand is going to skyrocket,” said Edward Moya, senior market analyst at data and analytics firm OANDA.
China’s overall passenger car sales are expected to rise 5 percent in 2023, Volkswagen AG president Ralf Brandstaetter told Chinese media.
China’s industrial output is expected to grow 3.6% in 2022 from the previous year. The Ministry of Industry and Information Technology (MIIT) said that although production and transportation have been disrupted due to COVID-19 controls.
The U.S. Energy Information Administration (EIA) said crude inventories rose 19.0 million barrels last week. That was the third-largest weekly increase ever and the largest since stocks rose to a record 21.6 million barrels in February. 2021 Last week’s increase came as refineries slowed. Resume production after cold shutdown at the end of 2022.
Analysts polled by Reuters had expected crude stockpiles to decline by 2.2 million barrels, and industry data from the American Petroleum Institute (API) showed a 14.9 million barrel gain.
The EIA this week forecast U.S. crude oil production will hit record highs in 2023 and 2024.
International caps on the sale of Russian crude come into effect on Dec. 5, and other restrictions aimed at the sale of the product will come into effect next month. As the European Union (EU) continues to operate additional punishment against Moscow invasion of Ukraine
The EU ban on Russian marine petroleum products imposed on February 5, the EIA said, could be more disruptive than the EU ban on Russian marine crude oil imposed in December 2022.
Russian Deputy Prime Minister Alexander Novak said the country’s oil producers had no problem in securing export deals despite Western sanctions and price caps