The price of a barrel of oil rose globally during trading today, Wednesday, January 18 (2023), to continue the gains for the second consecutive session.
This comes with optimism that lifting the strict restrictions imposed by China on Corona will lead to a recovery in fuel demand in the world’s largest oil importer.
The global price of a barrel of oil today
By 07:48 a.m. GMT (10:48 a.m. Mecca time), the prices of benchmark Brent crude futures – for delivery in March 2023 – rose by 0.72%, to $86.54 a barrel.
The price of US West Texas crude futures – February 2023 delivery – increased by 0.90%, to $80.90 a barrel, according to data seen by the specialized energy platform.
Oil prices ended their trading yesterday, Tuesday, January 17, on the rise, amid hopes for a recovery in demand.
Chinese demand
China’s economic growth slowed sharply to 3% in 2022, missing the official target of 5.5%, and marking the second-worst performance since 1976.
But the data still exceeds analysts’ expectations, after China began to back away from its policy of not spreading the Corona virus in December, as analysts polled by Reuters see that growth in 2023 will rebound to 4.9%.
The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report that Chinese oil demand will grow by 510,000 barrels per day this year.
But OPEC kept its forecast for global demand growth in 2023 unchanged, at 2.22 million bpd.
fuel demand
“The growing hopes that fuel demand in China will recover after the recent shift in its policy on Corona, which provided support for the price of a barrel of oil globally,” said analyst at Fujitomi Securities Co., Ltd., Toshitaka Tazawa.
He added that OPEC’s optimistic outlook on Chinese demand also supported market sentiment, “anticipating a bullish tone this week.”
The market also received support from expectations of a decrease in US crude stocks by about 1.8 million barrels, despite the rise in oil product stocks, from a Reuters poll.
US oil production
On the supply side, oil production from major US shale regions is set to rise by about 77,300 bpd to a record 9.38 million bpd in February, the US Energy Information Administration said in a production report on Tuesday.
Meanwhile, Russia expects Western sanctions to have a significant impact on its oil product exports and production, which could affect crude oil sales, said a senior Russian source familiar with the country’s future.
“Potential supply losses from Russia and the reopening of China could quickly tighten the market,” ANZ analysts said in a note to clients.
The market is also closely watching more demand data from China in the International Energy Agency’s monthly report due later on Wednesday, according to ING analysts.
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