Oil rises 1% to a five-month high due to forecasts of increased demand
By 12:12 PM EDT (1612 GMT), U.S. West Texas Intermediate (WTI) crude climbed $1.04, or 1.3%, to $84.21, while Brent futures gained 73 cents, or 0.8%, to $87.73 a barrel.
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On Monday, crude prices increased by almost 1% to a five-month high as it was anticipated that demand for oil would rise in response to good economic news from China and the United States, while OPEC+ supply restrictions and attacks on Russian refineries would restrict global supply.
By 12:12 PM EDT (1612 GMT), U.S. West Texas Intermediate (WTI) crude climbed $1.04, or 1.3%, to $84.21, while Brent futures gained 73 cents, or 0.8%, to $87.73 a barrel.
Both contracts were expected to close at their best levels since October 27. According to data released by the Commerce Department, the price index of personal consumption expenditures (PCE), which is the preferred inflation indicator used by the U.S. Federal Reserve, indicated a notable slowdown in February in the cost of services other than housing and energy.
“Chinese oil demand is arguably the one missing factor outside of geopolitical headlines capable of taking oil prices to the next level,” Bob Yawger, director at Mizuho, mentioned in a note.
“Strong summer gasoline demand and a rebound in China oil demand could be the one two punch that support $100 a barrel,” Yawger continued.
Contrary to Goldman Sachs analysts’ prediction of a 200,000 bpd decline in 2024, oil demand in Europe was stronger than anticipated in February, increasing by 100,000 barrels per day (bpd) year over year.
The second quarter will see Russia’s oil companies concentrate on lowering output rather than exports, according to Deputy Prime Minister Alexander Novak.
Due to the attacks, Russia’s capacity to process around one million barrels of crude per day is unavailable, which has an impact on its shipments of high-sulfur fuel oil that are processed at refineries in China and India.
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