The price of a barrel of oil rose globally by more than 1% at the end of the day, Monday, February 6 (2023), after declining significantly during the past week, to its lowest level in 3 weeks.
Oil prices fell by 8% over the past week, with increasing fears that slowing growth in major economies will lead to fuel consumption and affect demand recovery in China, which is the largest oil importer around the world, according to Reuters.
On Friday, February 3, the price of a barrel of oil fell globally, as Brent and West Texas Intermediate crude fell by 3%, after US jobs data raised concerns that the Federal Reserve will continue the policy of raising interest rates, according to what was seen by the energy platform. Niche.
The global price of a barrel of oil today
At the end of the session, Brent crude futures – for April 2023 delivery – rose by 1.3%, to reach $80.99 a barrel.
West Texas Intermediate crude futures – delivery in March 2023 – increased by 1%, to $ 74.11, according to the data seen by the specialized energy platform.
Recession dominated global oil markets during the past week, at a time when the dollar gained strength with the Federal Reserve’s announcement of new interest rates, especially since a strong dollar reduces demand for dollar-denominated oil from buyers who pay the price of a barrel of oil in other currencies.
Last Friday, the price of a barrel of oil fell globally, by 3%, after strong US jobs data raised concerns that the Federal Reserve would continue to raise interest rates, which in turn boosted the dollar. A stronger dollar usually reduces demand for dollar-denominated oil from buyers who pay in other currencies.
Reassess the decision to cut production
Yesterday, Sunday, February 5, 2023, Executive Director of the International Energy Agency (IEA), Fatih Birol, highlighted that China’s recovery remains a major driver of oil prices, as the agency expects that half of global oil demand growth this year will come from China.
Birol said that, depending on the strength of the recovery in oil demand, OPEC and the OPEC + alliance may have to re-evaluate their recent decision to reduce the oil production ceiling by two million barrels per day during the current year 2023.
Birol said, on the sidelines of a conference in India, that in the event that the demand for oil rises strongly, with the recovery of the Chinese economy, there will be a need for OPEC + countries to consider their production policies, according to the statements seen by the specialized energy platform.
No evidence of recovery
Analysts at ANZ said that there is no significant evidence yet of a recovery in domestic demand in China, although mobility figures are encouraging, so concerns about interest rate hike cycles in central banks are still the main drag on oil prices, after It fell by more than 7% last week.
Analysts pointed out that at the present time, market expectations prevail that non-member countries of the European Union will increase their imports of Russian crude derivatives, which leads to a state of turbulence in overall supplies.
It is noteworthy that the Saudi Minister of Energy, Prince Abdulaziz bin Salman, warned yesterday, Sunday, February 5, that sanctions and a lack of investment in the energy sector may lead to a shortage of supplies at a time when these supplies are most needed.
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