Oil prices ignored explosions at Oil refinery in Iran
2023.01.30 05:02
Oil prices ignored explosions at Oil refinery in Iran
By Ray Johnson
Budrigannews.com – Although optimism regarding a recovery in demand in China contributed to some gains, oil prices remained within a narrow range on Monday due to concerns regarding a drone attack on an Iranian facility and a glut facilitated by Russia.
A U.S. official said that Israel carried out a drone strike over the weekend on an Iranian defense facility. This could cause political tensions in the Middle East to rise, which could disrupt global crude supplies.
After the Lunar New Year holiday, Chinese markets reopened with a vengeance, with high hopes that the country’s economic recovery will be a major driver of crude demand this year. Over the weekend, there were reports that travel in the country had significantly improved during the weeklong holiday, and the government promised to support the growth of the local economy.
By 21:33 ET (02:33 GMT), it had increased 0.3 percent to $86.65 a barrel and 0.3 percent to $79.94 a barrel. However, data indicating increased crude exports from Russia’s Baltic ports in January caused both contracts to experience their first weekly loss in three weeks.
Traders are weighing the possibility of a recovery in Chinese demand against worries about a global recession this year, which could lead to a largely flat closing for oil prices in January.
Even though crude demand is expected to rise this year as a result of a Chinese recovery, the country is still dealing with the worst COVID-19 outbreak in its history, which has made it unclear when this recovery will occur.
A meeting of the Organization of Petroleum Exporting Countries and its allies (OPEC+), which is expected to meet on February 1 to decide on the cartel’s monthly production targets, is also the topic of discussion this week.
However, despite some uncertainty regarding the direction that crude demand will take in the near future, the group is largely anticipated to maintain current production levels.
This year’s wild swings in oil prices have been accompanied by worries about a global recession. Although the performed better than anticipated in the fourth quarter of 2022, the markets are concerned that this momentum may lose steam as the effects of tighter monetary policy and relatively high continue to be felt.
Markets are now awaiting further clues regarding the world’s largest economy this week. This week also includes key economic indicators from China and the euro area.
