Crude oil rises in early trade

15 Mar 2023 , 08:11 AM

After falling the day before, oil prices increased in early Asian trading on Wednesday as a more optimistic OPEC assessment of Chinese demand helped counteract gloomy investor sentiment worldwide following the recent collapse of U.S. banks.

Brent crude futures were up 62 cents, or 0.8%, to $78.07 per barrel. West Texas Intermediate (WTI) crude for the United States increased by 70 cents or 1.0% to $72.03 a barrel. The benchmarks dropped more than 4% on Tuesday, reaching a three-month low.

The Organization of the Petroleum Exporting Countries (OPEC) upped its prediction for Chinese oil demand growth in 2023 on Tuesday as a result of the country’s COVID-19 limitations being loosened, but it maintained its forecast for total global demand, citing potential dangers to global growth.

Concerns regarding dangers to other banks as a result of the U.S. Federal Reserve’s significant interest rate increases during the previous year were raised in response to the failure of Silicon Valley Bank and Signature Bank. That also sparked debate over whether the central bank could moderate the rate at which it was tightening the money supply.

The U.S. inflation figures released on Tuesday met expectations, increasing the likelihood that the Federal Reserve will raise interest rates slightly at its meeting the following week.

The American Petroleum Institute said on Tuesday that U.S. crude oil inventories increased by nearly 1.2 million barrels in the week ending March 10 while gasoline stockpiles decreased.

Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, stated in an interview with Energy Intelligence on Tuesday that the OPEC+ coalition, which consists of OPEC and other oil-producing nations like Russia, will adhere to the production limits decided upon in October through the end of the year.

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