Oil prices remain stable

20 Feb 2023 , 09:23 AM

After finishing at $2 a barrel on Friday, oil prices were little changed in early Asian trade on Monday as expectations for a recovery in China’s demand were dampened by rising supplies in the United States and predictions of further interest rate hikes.

Brent crude was down 9 cents, or 0.1%, to $82.91 per barrel. Tuesday’s expiration price of U.S. West Texas Intermediate crude was $76.40 a barrel, up 6 cents. April’s busier contract lost 9 cents to reach $76.46.

The benchmarks decreased by roughly 4% last week as a result of increasing crude and gasoline stockpiles reported by the US.

Meanwhile, Washington announced intentions to release 26 million barrels of crude from the Strategic Petroleum Reserve (SPR), which Energy Aspects analysts said could result in greater stocks at Cushing, Oklahoma, the delivery location for WTI contracts, until May.

Oil prices were also restrained by expectations that the U.S. Federal Reserve will keep raising interest rates, which might strengthen the dollar. Oil priced in dollars is more expensive for holders of foreign currencies when the dollar is stronger.

Kazakhstan will provide 100,000 tonnes of oil via Russia’s Druzhba pipeline to Germany in March for the PCK Schwedt plant, another hint of better supplies.

Investors in Asia are watching the People’s Bank of China’s decision regarding mortgage rates to assist the revival of the country’s economy and real estate market, according to CMC Markets analyst Tina Teng. The largest consumer of crude oil worldwide is China.

Experts predict that China’s imports will reach a record high in 2023 as a result of rising demand for transportation fuel and the startup of new refineries.

With the European Union embargo, China and India have emerged as the two largest consumers of Russian crude.

According to trade figures, India imported a record 1.4 million barrels of Russian oil daily in January.

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