Crude oil prices turned higher today, Tuesday, March 28 (2023), to continue to reap gains for the second consecutive session, amid fears of a supply shortage.
Crude prices had started their morning trading on a decline due to the focus on the developments of the banking crisis that affected several international banks, and the demand indicators in China.
Crude oil prices witnessed a significant increase at the end of yesterday’s trading, Monday, March 27, achieving a large jump of more than 5%, which is the fastest pace it has moved in 4 months, according to what was published by Reuters.
The price hike was supported by the International Court’s decision in favor of Baghdad in its dispute with Ankara over Iraqi Kurdistan’s oil, which resulted in the cessation of pumping supplies through a pipeline between them, according to what was seen by the specialized energy platform.
Crude oil prices today
By 02:17 pm GMT (05:17 pm Mecca time), benchmark Brent crude futures, for May 2023 delivery, rose 0.68%, recording $ 78.65 a barrel.
West Texas Intermediate crude futures increased by 0.74%, recording $73.35 a barrel, according to the specialized energy platform.
The rise in crude oil prices comes after volatile sessions on Monday, which pushed the benchmark Brent crude and West Texas Intermediate crude to above $78 a barrel, by more than 5% by the end of transactions.
The announcement that First Citizen Bank Shares, which specializes in banking transactions, would take over the deposits and loans of the collapsed Silicon Valley Bank, sparked a wave of optimism about the state of the banking sector, which disturbed the financial markets.
Oil price analysis
Barclays said the prolonged disruption of Kurdish exports until the end of the year would imply a rise of $3 per barrel compared to the bank’s Brent forecast of $92 per barrel for 2023.
Analyst at CNC Markets, Tina Teng, said that although risks remain in the banking system amid recent events, purchases of crude oil shipments may be the prevailing trend in the near term.
It is likely – according to the financial analyst – that crude oil prices will continue to recover, with the support provided by indicators of recovery in demand in China for crude and fuel, with life there returning to normal, according to statements reviewed by the specialized energy platform.
Forecasts indicate that China’s imports of crude oil may rise by 6.2% in 2023, to record about 540 million tons, according to annual forecasts of a research unit of the China National Oil Company.
“China’s manufacturing and services PMIs will be a major economic driver for crude oil prices, as positive data is likely to further improve the outlook for oil demand,” Teng added.
Today, Tuesday, the American Petroleum Institute is expected to publish data related to oil stocks in the United States, at a time when a Reuters poll showed that these stocks rose by about 200,000 barrels during the past week.
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