Singapore, Feb. 16 (BNA): Oil prices rose today, Thursday, as hopes for a strong recovery in fuel demand in China, the largest oil consumer, offset losses caused by a strong dollar and an increase in US crude stocks.
Brent crude futures rose 42 cents, or 0.5%, to $85.80 a barrel by 0352 GMT, while US West Texas Intermediate crude futures rose 48 cents, or 0.6%, to $79.07 a barrel, Reuters reported.
The International Energy Agency said oil demand will rise by 2 million bpd in 2023, up 100,000 bpd from last month’s forecast to a record 101.9 million bpd, with China making up 900,000 bpd of the increase.
The Paris-based agency said China will account for nearly half of oil demand growth in 2023 after easing COVID-19 restrictions. Read more
The US dollar, which is moving inversely to crude oil prices, rose on bullish US retail sales data and clung on to most of those gains on Thursday.
“In terms of China, the optimistic outlook for OPEC and the International Energy Agency has helped. The net uptick has countered the weight of the huge US oil stock build, but I don’t see any further upside yet,” said Vandana Hari, Oil Market Analyst. Provider of Vanda Insights.
The Energy Information Administration said that US crude oil inventories jumped last week by 16.3 million barrels to 471.4 million barrels, the highest level since June 2021. The larger-than-expected increase was largely due to the data revision, which analysts said softened the impact on oil prices. oil.
“Oil prices are expected to fluctuate in a narrow range, caught between divergent supply and demand dynamics,” said independent market expert Sugandha Sachdeva.
“While the steady rise in US production and inflation in inventories along with a broad recovery in the US dollar act as a headwind to oil prices, the story of a strong demand recovery from China and prospects of a Russia-related production cut continue to lift oil prices,” Sachdeva added.
About 1 million barrels per day of oil production will be shut down by the end of the first quarter, the International Energy Agency said, in the wake of European bans on seaborne imports and international price cap sanctions.
Analysts at the Commonwealth Bank noted in a note that OPEC+ will not look to increase production to make up for lower Russian production.
The note added that this means that the responsibility will fall on the United States and other non-OPEC producers to boost production not only to compensate for the decline in Russian production, but also to face any additional increase in global demand for oil.
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