On Monday, oil prices recovered from Friday’s slight loss after better-than-expected economic data from China hinted at higher March imports.
The US West Texas Intermediate (WTI) petroleum futures for May delivery surged 1.92% to $82.16 per barrel on March 18. Nonetheless, industry watchers predict a 0.19% drop to $81.00 a barrel in the following trading session.
Simultaneously, Brent oil May futures gained 1.83% to $86.89 a barrel, setting its second 5-month high this month. Furthermore, trade analysts project a 0.52% increase to $87.34 per barrel in the coming market day.
In addition, the Energy Information Administration (EIA) reported a record 4.10 million barrels per day (bpd) in US oil exports last year. It broke the previous annual record of 3.62 million bpd set in 2022 for a 13.00% year-over-year growth.
Meanwhile, Russia said Ukrainian drone strikes on its petroleum infrastructure will reduce its first-quarter refining capacity by 7.00%. Commodity experts cautioned that Moscow’s retaliation on Ukraine’s oil facilities will disrupt supply in the region.
OPEC+ top producer, Saudi Arabia, posted exports of 6.30 million bpd in January, down from 6.31 million bpd in December. Similarly, the bloc’s second-largest producer, Iraq, announced it would cut its exports to 3.30 million bpd in the coming months.
China to Lift Oil Imports on Robust Economic Data
On Monday, China revealed that its industrial production advanced 7.00% YoY in January-February, signaling a boost in oil demand. The reading accelerated from the 6.80% rise in the previous month and topped the market consensus of a 5.30% climb.
During the same period, China’s retail sales soared by 5.50% YoY, defying expectations of a 5.20% increase. However, the retail sector’s growth decelerated from the 7.40% recorded in December but marked 12 consecutive months of expansion.
According to the National Bureau of Statistics of China, a growing factory sector leads to an increase in oil demand. Lastly, rising retail sales point to economic optimism, resulting in higher consumer activity and demand for transport fuels.
