Oil prices rise in early trade

1 Mar 2023 , 09:06 AM

On Wednesday, oil prices increased for a second day as expectations for global fuel consumption were raised by news of rising manufacturing activity in China, the largest consumer of crude.

May Brent crude oil was up 24 cents, or 0.3%, to 83.69 per barrel. The April contract reached its expiration on Tuesday at $83.89, up $1.44 or 1.8%.

After increasing 1.8% in the previous session, U.S. West Texas Intermediate (WTI) crude for April increased 31 cents, or 0.3%, to $77.36 per barrel.

Expectations for a significant increase in demand in China, the world’s second-largest consumer of crude oil, continue to support oil prices. According to statistics from the purchasing manager’s index (PMI) released by Caixin/S&P Global on Wednesday, manufacturing activity in China increased in February for the first time in seven months.

On Wednesday, official government PMI numbers were also released, showing that February saw the manufacturing sector’s highest expansion since 2012.

The United States, the world’s largest oil consumer and producer, showed signs of increasing crude stocks, which negated the positive demand signal.

According to news reports quoting American Petroleum Institute (API) data on Tuesday, the United States’ oil stocks increased by 6.2 million barrels in the week ending February 24. 

But, according to the API statistics, gasoline stockpiles fell by 1.8 million barrels and distillate fuels, such as diesel and jet fuel, fell by 340,000 barrels.

Later on Wednesday, the official U.S. government is expected to release stockpile numbers.

According to a Reuters survey of analysts, last week saw a gain of roughly 500,000 barrels. This data is expected to indicate rises for the tenth week in a row.

Data from the Organization of the Petroleum Exporting Countries (OPEC) also revealed more indications of an increase in supplies.

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