Crude Oil: Saudi expects increased demand from China, prices rise

8 Feb 2023 , 11:38 AM

On Tuesday, oil prices increased for the second straight session, supported by hopes for reviving Chinese demand and worries about supply shortages due to the closure of a significant export terminal following an earthquake in Turkey.

Brent crude futures increased by 98 cents, or 1.2%, to $81.97 per barrel, while West Texas Intermediate U.S. crude futures increased by $1.34, or 1.8%, to $75.45 per barrel.

With the anticipation of a revival in demand, particularly from China, Saudi Arabia, the top oil exporter in the world, increased prices for its flagship crude for Asian consumers for the first time in six months.

Iraqi crude oil loadings from Ceyhan storage were prepared to resume on Tuesday, but poor weather prevented ships from berthing, according to a trade source with first-hand information.

The energy ministry of the Kurdistan Regional Government said that the crude oil pipeline from Iraq to the Ceyhan port in Turkey remained shut down.

Prices were also raised by the closure of the Johan Sverdrup oilfield’s 535,000 bpd Phase 1 portion in Norway’s portion of the North Sea.

The U.S. Federal Reserve Chair’s address on Wednesday will be closely watched by the oil markets. Increases in interest rates often result in a stronger currency, which could increase the price of crude for non-American consumers.

As it substantially increased investment plans but scaled back expectations to limit oil and gas output by 2030, BP on Tuesday reported a record profit of $28 billion for 2022 while also increasing its dividend in a display of confidence.