Oil prices steady on small rise in US crude stocks, weaker dollar
US crude exports surged nearly 22 percent to 4.71 million barrels per day in the week ending January 20, their highest since November
IL prices were steady on Thursday trade after a smallerthan-expected rise in S crude stocks and a weaker dollar.
Brent, the benchmark for two thirds of the world’s oil, was 0.72 percent higher at
8 .74 a barrel at 3.01pm Qatar time. West Texas Intermediate, the gauge that tracks S crude, was up 0.80 percent at 80.79 a barrel.
“Crude prices are rising after the stockpiles posted a modest gain and a decent improvement with demand,” said Edward Moya, senior market analyst at anda.
S crude inventories rose by about 533,000 barrels last week, according to the S Energy Information Administration EIA .
The indicator, which shows the level of oil and product stored, gives an overview of
S petroleum demand. If the increase in crude inventories is more than expected, it implies weaker demand and is bearish for crude prices.
S petroleum stocks increased by 1.8 million barrels last week, while distillate fuel inventories rose by about 500,000 in the same period, the statistical arm of the S department of energy said.
Meanwhile, S crude exports surged nearly 22 per cent to 4.71 million barrels perday in the week ending January 20, their highest since November, the EIA said. Earlier, data from the American Petroleum Institute showed that S crude stocks rose by about 3.4 million barrels last week.
“Lately, it seems this oil market has a tendency to lean towards a bullish spin after any major oil event,” Moya said.
“If risk appetite continues to take a big hit from the techdriven sell-off, that should also weigh on crude prices.”
Russian seaborne crude exports rebound to two-month high in January, report says
Futures were also supported by a weaker dollar, which makes oil cheaper for holders of other currencies.
The S Dollar Index, a measure of the value of the greenback against a weighted basket of major currencies, was down 0.0 per cent at 101.58.
il futures have gained for two straight weeks after China
the world’s second-largest economy and top crude importer reopened its borders for the first time in three years, triggering a sharp increase in airline bookings.
The market has “underpriced” China’s recovery, according to Japanese bank M F . “China is a dominant driver of commodities demand
consuming anything from about 10 per cent to 15 per cent of global oil and gas demand,” said Ehsan Khoman, head of research commodities, ES and emerging markets at M F .
“As such, China’s reopening matters profoundly for commodities balances as well as market pricing. et, with China’s activity levels past their trough and mobility rapidly normalising, this does not tally up with the broad commodity positioning.”
China’s economy, which grew 3 per cent in 2022, is expected to improve and is highly likely to reach a normal growth rate in 2023, Vice Premier Liu He told the World Economic Forum in Davos last week.
lobal oil demand will surge to a record this year, after the end of coronavirus restrictions in China, according to the International Energy Agency.
il demand will rise by 1.9 million bpd to 101.7 million bpd in 2023, said the IEA, which had previously estimated a growth of 1.7 million bpd.
pec, meanwhile, has stuck to its global oil demand forecast for this year, despite an improving economic outlook in China.
The group still expects oil demand to grow by 2.2 million bpd this year, which is lower than its estimate of 2.5 million bpd growth for 2022.
There is likelihood that an PEC panel would move to endorse the producer group’s current oil output policy when it meets next week, five PEC sources said on Tuesday, as hopes that improved Chinese demand would drive an oil price rally were balanced by economic concerns.
Ministers from PEC and allies led by Russia, known collectively as PEC , meet virtually on February 1. The panel, called the Joint Ministerial Monitoring Committee JMMC , can call for a full PEC meeting if warranted.
The meeting comes as the price of oil has rallied in 2023 towards 90 a barrel on hopes Chinese demand will recover while the European nion and
roup of Seven 7 is set to broaden a price cap on Russian crude to refined products from February 5.
Five PEC sources told Reuters the JMMC would discuss the economic outlook and the scale of Chinese demand, and was unlikely to suggest tweaks to current policy. ne said oil’s rebound in 2023 make any changes unlikely.
“PEC is by now somewhat comfortable that the difficult time of C VID’s impact is behind us and the geopolitical situation and China’s recovery are driving the volatility,” another of the PEC sources said.