Crude oil prices rose, at the end of trading today, Friday, April 14 (2023), amid expectations of a recovery in demand in China with declining supplies, to achieve weekly gains for the fourth time in a row.
The International Energy Agency expected global oil demand to grow by two million barrels per day in 2023 to a record level of 101.9 million barrels per day, driven by increased consumption in China after the lifting of Corona restrictions.
The agency said in its monthly report issued today, Friday, that it expects the growth of global oil production to slow to 1.2 million barrels per day, compared to 4.6 million in 2022, and non-OPEC + countries will lead the increase by about 1.9 million barrels per day, led by the United States and Brazil, while from It is expected that the production of the OPEC + coalition will decrease by 760 thousand barrels per day in 2023.
The weekly report of Baker Hughes showed that the number of oil drilling rigs in the United States decreased by two during the past week, bringing the total to 588 rigs.
Crude oil prices today
At the end of the session, Brent crude futures for June 2023 delivery rose 0.2%, to record $86.31 a barrel.
West Texas Intermediate crude futures – for May 2023 delivery – increased by 0.4%, recording $82.52 a barrel, according to what was seen by the specialized energy platform.
Crude oil prices ended their trading, yesterday, Thursday, April 13, down by more than 1%, after two sessions of gains, amid fears of falling demand.
Oil prices achieved a fourth consecutive weekly gain; WTI jumped 2.3% and Brent rose 1.4%.
demand for oil
“Russian exports are showing signs of weakness as production is reported to have shrunk by 700,000 barrels per day,” analysts from ANZ Bank said in a note to clients.
Investors are also focusing on the International Energy Agency’s monthly oil market report, which will be released later on Friday.
The possibility that the agency will lower global demand forecasts on faltering macroeconomic growth helps limit crude oil prices.
A report by the Organization of the Petroleum Exporting Countries (OPEC), released on Thursday, pointed to the risks of falling demand in the summer, pointing to the backdrop of weak growth, tightening monetary policy and instability in the global financial sector.
Oil market analysis
However, Chinese trade data on Thursday showed that crude oil imports by the world’s second largest oil consumer rose 22.5% year-on-year in March; This sparked bullish sentiment regarding China’s economic recovery.
“Despite renewed economic pressures in the US and Europe, global demand for mobility fuels increased by 2.2 million barrels per day in the week ending April 8 compared to year-ago levels,” JPMorgan analysts said in a note to clients.
Analysts said that the recovery in China along with other Asian countries – accounting for two-thirds of global mobility – is fueling demand growth, according to the data seen by the specialized energy platform.
Oil price forecast
Crude oil prices recorded, during the current week, their highest levels in more than two months, amid sluggish US inflation data and the decline of the dollar, amid expectations that the Federal Reserve is approaching the end of the cycle of raising interest rates.
The decline in the price of the dollar makes oil denominated in the US currency cheaper for investors who hold other currencies; which boosts demand.
Analysts indicate that the current crude oil prices may be close to the technical ceiling, and analyst at OANDA, Edward Moya, says: “It seems that the price hike has finally reached a dead end,” according to Reuters.
Crude oil prices are expected to register an upward trend, but increases are expected to be capped at $90 per barrel, according to CMC Markets analyst Leon Lee.
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