Oil prices increased for a second session on Tuesday, boosted by hopes of a recovery in demand in China and concerns about a supply shortage after an earthquake in Turkey shut down a major export terminal.
Brent crude futures were up 74 cents, or 0.932%, at $81.73 a barrel, while West Texas Intermediate U.S. crude futures were up 87 cents, or 1.23%.
The price of a barrel is finding support as the reopening of the Chinese economy should lead to a significant increase in demand for crude this year.
IEA expects half of this year’s increase in global oil demand to come from China, the agency’s chief said on Sunday, adding that demand for jet fuel has increased.
Saudi Arabia, the world’s giant oil exporter, raised prices for its flagship oil to Asian buyers for the first time in 6 months amid expectations of a recovery in demand, particularly from China.
Work at Turkey’s 1 million bpd oil export terminal in Ceyhan was halted after a strong earthquake hit.
According to analysts, the oil markets are waiting for the speech of the U.S. Fed head, Jerome Powell. Interest rate increases tend to strengthen the dollar, which could push up crude oil prices for non-US buyers.
The rise in oil prices looks more like a cautious move ahead of Powell’s speech, when the Fed head may provide more guidance on future rate hikes.
B.P. announced a record profit of $29 billion for 2022 and a dividend hike in a sign of confidence as it sharply increased its overall cutback plans but scaled back ambitions to cut oil production by 2030.
European Gas Swings
European natural gas has been fluctuating as a small cold spell ends, while healthy supplies help support any uptick in demand.
Benchmark futures ranged between small gains and losses after earlier falling 2.34%. Current cold weather in western and central Europe, combined with low wind output, increases gas consumption. However, temperatures should rise soon and could remain above seasonal levels for the next two weeks, according to forecaster Maxar Technologies Inc.
Prices have fallen by more than 21% this year and are close to levels seen before the Russian invasion of Ukraine. Reduced consumption by industries and a generally mild winter has reduced the need to use underground storage well above five-year levels.
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