Oil prices have been rising for two weeks in a row
2023.01.20 03:39
Oil prices have been rising for two weeks in a row
By Ray Johnson
Budrigannews.com – Oil prices were expected to rise for a second week in a row on Friday as a result of China’s improving economic prospects, which should increase fuel demand in the world’s second-largest economy.
By 0655 GMT, futures for March delivery had increased by 26 cents, or 0.3 percent, to $86.42 per barrel and by 43 cents, or 0.5 percent, to $80.76 per barrel.
On Thursday, both closed up 1%, close to their highest levels since December 1.
According to data from the Joint Organizations Data Initiative released on Thursday, Chinese oil demand in November increased to its highest level since February. On Tuesday, OPEC stated that the easing of China’s COVID-19 restrictions would drive global growth and boost oil demand this year.
The expectation that the U.S. central bank would soon end its cycle of tightening was another factor that supported oil prices.
John Williams, president of the Federal Reserve Bank of New York, said on Thursday that the central bank in the United States is seeing signs of inflationary pressures cooling off from their extreme levels.
“More crude is required by the two largest economies in the world. OANDA senior market analyst Edward Moya stated, “The oil market has been down on fears of a global recession, but it still is showing signs it can remain tight for a little while longer.”
A weaker was also providing price support, and it was headed for its second weekly decline in a row. When the dollar weakens, foreign buyers can purchase crude at a lower price.
Tina Teng, an analyst at CMC Markets, stated, “Oil traders are potentially buying the dip now, amid optimism about China and the United States.”
In a Reuters poll, the majority of economists said that the Fed will end its tightening cycle after raising interest rates by 25 basis points at each of its next two policy meetings and likely keep them the same for at least the rest of the year.
A decrease in the rate of increase has been supported by a number of other Fed officials.
According to International Energy Agency (IEA) head Fatih Birol on Thursday, tighter energy markets could occur in 2023 as a result of a rebound in the Chinese economy and sanctions on the Russian oil industry.
