The price of a barrel of oil rose globally by about 2%, at the end of trading today, Friday, January 13, 2023, for the seventh session in a row, amid optimism about the recovery of demand.
Oil prices gained more than 8% this week, amid strong indications of demand growth in China, the largest importer of crude oil, and expectations of less sharp increases in interest rates in the United States.
On the other hand, US companies added 5 rigs to explore for oil in the United States during the past week, bringing the total to 625 rigs.
The global price of a barrel of oil today
At the end of trading, the prices of benchmark Brent crude futures – for delivery in March 2023 – rose by about 1.5%, to $85.28 a barrel.
The price of US West Texas crude futures – for February delivery 2023 – increased by 1.9%, to $79.86 a barrel, according to data seen by the specialized energy platform.
And the global price of a barrel of oil ended its dealings, yesterday, Thursday, January 12, with an increase of more than 1.5%, to continue its rise for the sixth session in a row, after the inflation data in the United States.
The two benchmarks (Brent and West Texas) rose by 8.5% and 8.3%, respectively, during the week ending today.
Oil market conditions
Analysts said that the recent Chinese crude purchases and the recovery of road traffic boosted confidence in the recovery of demand in the second largest economy in the world after reopening its borders and easing Corona restrictions after last year’s protests.
“Given the focus on energy security, we expect Chinese imports to continue to rise, especially since stockpiling crude oil remains a strategic priority,” said RBC Commodities Strategist Michael Tran.
In another encouraging sign, ANZ analysts said the congestion index, which covers the 15 Chinese cities with the largest number of vehicle registrations, rose 31% from the previous week, Reuters reported.
The decline in the price of the dollar
The price of a barrel of oil was also boosted globally by the dollar’s decline to its lowest level in almost 9 months after data showed inflation in the United States fell for the first time in two and a half years; This fueled expectations that the Federal Reserve will slow down the pace of interest rate hikes.
Dollar weakness tends to increase demand for oil; Because it makes the commodity cheaper for buyers who hold other currencies.
However, some of the week’s gains in Asian trade are likely to fade, said Vanda Insights oil market analyst Vandana Hari.
She added, “Crude oil is on the way to a correction, even if it’s modest… The previous two sessions were driven almost entirely by renewed Fed pivot hopes which, according to the experience of the past quarter, tend to be a short-term phenomenon.”
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