Crude oil prices rose, during trading today, Monday, February 20 (2023), amid optimism about the recovery of demand in China.
And it supported fears that a lack of investment would impede oil supply in the future, with the main producers continuing to impose production restrictions.
Crude oil prices today
By 07:10 am GMT (10:10 am Mecca time), the price of benchmark Brent crude futures – for delivery in April 2023 – increased by 0.77%, to reach $ 83.64 a barrel.
The price of US West Texas crude futures – delivery in March 2023 – increased by 0.65%, to $76.84 a barrel, according to data viewed by the specialized energy platform.
On Friday, February 17, crude oil prices ended their trading, down by more than 2.5%, amid fears of a global recession that might affect demand.
During the past week, the prices of both crudes (Brent and West Texas) recorded losses of about 4% and 4.2%, respectively.
Oil market conditions
“Brent and WTI prices are slightly higher this morning after selling off on recent hawkish comments from the Federal Reserve, after stronger-than-expected CPI and PPI data in the US,” said Baden-Moore, head of commodities research at National Australia Bank Baden-Moore. United”.
He added, “While last week’s announcement that the US will sell 26 million barrels of strategic oil reserves adds some downward pressure on the market, global supply appears to be ‘flat-down’ versus the previous corresponding period after taking into account production cuts by Russia.” and OPEC+.
This comes in reference to the agreement of the Organization of the Petroleum Exporting Countries (OPEC) and allies of the group known as OPEC + last October to reduce oil production targets by two million barrels per day until the end of 2023.
Russia plans to cut oil production by 500,000 barrels per day, or about 5% of production, in March after the West imposed price ceilings on Russian oil and petroleum products.
demand for oil
“In this context, we continue to see a reopening of China, a recovery in China and global demand for aircraft to drive upside risks,” Moore said. China is the world’s largest importer of crude oil, according to Reuters.
Analysts expect China’s oil imports to reach an all-time high in 2023 due to increased demand for transportation fuels and as new refineries come online.
China, along with India, has become a major buyer of Russian crude following the EU ban.
At the same time, future supply shortages are likely to push crude oil prices towards $100 a barrel by the end of the year, analysts from Goldman Sachs said in a note dated February 19.
They explained that prices will rise “with the market returning to deficit with the lack of investment, shale oil restrictions, and OPEC discipline that ensures that supply does not meet demand.”
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