Crude oil prices rose at the end of trading today, Thursday, March 2 (2023), to continue reaping gains for the third consecutive session.
The oil markets witnessed a volatile session, as trading began on the rise, and then fell under pressure from fears of falling demand after the data showed a decline in US oil inventories.
Crude oil price gains were supported by signs of a strong economic recovery in China, the largest importer of crude, but it remained under control due to fears of the impact of potential increases on European interest rates.
Crude oil prices today
At the end of the session, Brent crude futures prices – for May 2023 delivery – increased by 0.5%, to reach $84.75 per barrel.
The price of US West Texas crude futures – delivery in April 2023 – increased by 0.6%, to $78.16 a barrel, according to data seen by the specialized energy platform.
And crude oil prices ended their dealings, yesterday, Wednesday, March 1, on the rise, to continue reaping gains for the second session in a row, recording the highest level in two weeks.
Oil market conditions
Data showed that, in February, manufacturing activity in China grew at the fastest pace in more than a decade; Which adds evidence of an economic recovery in the second largest economy in the world after easing Corona restrictions.
China’s seaborne imports of Russian oil are set to hit a record level this month, as refiners benefit from cheap prices.
On the other hand, the tenth consecutive week of accumulation of crude oil inventories in the United States capped the market gains, as the Energy Information Administration reported that US oil inventories rose by 1.2 million barrels in the week ending February 24 to 480.2 million barrels, which is its highest level. Since May 2021.
Analysts, polled by Reuters, had expected an increase of 500 thousand barrels.
However; Record exports of US crude oil kept the increase lower than in recent weeks; Shipments rose to 5.6 million barrels per day last week, according to the Energy Information Agency.
demand for oil
Serena Huang, head of Asia-Pacific analysis at analytics firm Vortexa, said gains in crude oil prices during the previous two sessions were also capped by looming uncertainty over the outlook for global aggregate demand; This left prices “largely unchanged”.
Expectations are rising for a rate hike by the European Central Bank after inflation in Germany, Europe’s largest economy, rose more than expected in February, as food and energy prices rose despite relief measures.
Inflation in the eurozone rose to a higher-than-expected annual rate of 8.5% in February, according to a first estimate from the European Union’s statistics agency.
In the US, manufacturing contracted, for the fourth consecutive month, in February, although there were signs that factory activity was beginning to level off, with the measure of new orders falling from its lowest level in more than two-and-a-half years.
Oil price forecast
“German inflation has raised concerns that the European Central Bank should be more aggressive, and US data also shows that the economy is still slowing but some parts are improving,” said Edward Moya, senior market analyst at OANDA, in a note.
He added, “It appears that crude oil prices will remain stuck in a limited trading range, but it is clear that the risks are to the upside.”
He noted that some traders may wait until they get a better idea of the peak rate after the non-farm payroll report next Friday.
Meanwhile, crude oil processed by Indian refineries reached record levels in January, interim government data showed on Wednesday, as the country boosted imports of Russian oil that Western countries shunned.
Refinery productivity in the world’s third-largest oil importer and consumer reached 5.39 million barrels per day for the month of January, the highest level since Reuters records dating back to 2009.
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