Crude oil prices rose at the end of their trading today, Wednesday, March 1 (2023), to continue to reap gains for the second consecutive session, recording the highest level in two weeks, after the release of US inventories data.
This comes with a strong jump in manufacturing in China, the world’s largest crude importer, which has boosted the outlook for global fuel demand.
Crude oil prices today
At the end of the session, Brent crude futures prices – for May 2023 delivery – increased by 0.5%, to reach $84.31 per barrel.
The price of US West Texas crude futures – April 2023 delivery – increased by 0.8%, to $77.69 a barrel, the highest close since February 16, 2023, according to data seen by the specialized energy platform.
Crude oil prices ended their trading, yesterday, Tuesday, February 28, with an increase of about 2%, but they recorded monthly losses.
Brent and West Texas Intermediate crude futures ended February with monthly losses of 0.7% and 2.3%, respectively.
Chinese demand
Crude oil prices continue to be supported by expectations of a strong recovery in demand in China, the world’s second largest consumer of crude.
“Another round of bullish surprise in China’s PMI provides further conviction for a stronger-than-expected recovery, supporting a more optimistic outlook for oil demand,” said IG Market Strategist, Yip Junrong.
“This provided a much-needed catalyst for crude oil prices to take some relief from the earlier sell-off on Monday, as China’s recovery shows it is on track to mitigate some of the weakness in global demand from hawkish central banks,” Yip added.
Data showed that factory activity in China rose for the first time in 7 months, in February, according to the Purchasing Manager’s Index.
Official government purchasing managers’ index data, also released on Wednesday, showed that the fastest expansion in manufacturing since 2012 occurred in February.
US oil stocks
However, the strong demand signal was offset by signs of rising oil inventories in the United States, the world’s largest oil consumer and producer.
US oil inventories rose by 1.2 million barrels in the week ending February 24, continuing to rise for the tenth consecutive week, according to the US Energy Information Administration.
However, gasoline stocks fell by 0.9 million barrels, and distillates, including diesel and jet fuel, rose by 200,000 barrels.
Analysts expected in a Reuters poll that an increase of about half a million barrels of US oil stocks last week.
Further signs of rising supplies are seen in the data from the Organization of the Petroleum Exporting Countries (OPEC).
A Reuters survey found that OPEC pumped 28.97 million bpd in February, up 150,000 bpd from January.
Despite the increase, production is still down by more than 700,000 bpd since September.
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