Oil prices are rising modestly
2023.01.18 12:47
Oil prices are rising modestly
By Kristina Sobol
Budrigannews.com – On the hope that China’s lifting of its strict COVID-19 restrictions will result in a recovery in fuel demand in the world’s largest oil importer, oil prices increased on Wednesday to their highest level since the beginning of December.
By 13:52 GMT, futures were up $1.12, or 1.30 percent, to $87.04 a barrel, and WTI crude futures were up $1.28, or 1.6 percent, to $81.46. Since early December, both were at their highest levels.
In 2022, China’s economic expansion slowed dramatically to 3%, falling short of the government’s stated goal of “around 5.5%” and marking the country’s second-worst performance since 1976.
However, despite China’s beginning to reverse its zero-COVID policy at the beginning of December, the data still exceeded analyst expectations. Reuters polled analysts and forecast growth of 4.9% in 2023.
The International Energy Agency (IEA) stated on Wednesday that China’s lifting of COVID-19 restrictions is expected to raise global oil demand to a new record high this year, while price cap sanctions on Russia may reduce supply.
After contracting for the first time in years in 2022 as a result of COVID containment measures, the IEA report followed expectations from the Organization of the Petroleum Exporting Countries (OPEC) that Chinese oil demand would grow by 510,000 barrels per day (bpd) this year.
However, OPEC maintained the same forecast for global demand growth in 2023.
“No other single entity will play a more significant role in shaping oil balances over the coming months,” PVM analyst Stephen Brennock said of China.
A Reuters poll found that expectations of a stock decrease of approximately 1.8 million barrels in the week ending January 13 provided additional support. EIA/S] The survey was carried out ahead of the American Petroleum Institute’s reports, which are due on Wednesday at 4:30 p.m. ET (2130 GMT).
A larger-than-anticipated decrease in retail sales in the United States in December dampened price increases to some extent.
According to the U.S. Energy Information Administration (EIA) on Tuesday, oil production from top shale regions in the United States is anticipated to rise by approximately 77,300 bpd to a record 9.38 million bpd in February.
