On Thursday, crude oil had a price rally amid the growth of Chinese demand and a drop in Saudi Arabian exports.
The US West Texas Intermediate (WTI) crude oil futures for March delivery rose by 0.40% to $80.93 per barrel. Likewise, the Brent contracts increased by 0.32% to $86.44 a barrel. It was the highest closing level for both benchmarks.
The demand in China jumped by nearly a million barrels per day compared to last month. It totaled 154.00 million bpd in November, the highest level since February.
According to International Energy Agency (IEA) head Fatih Birol, energy markets can tighten in 2023 if the Chinese economy rebounds. In addition, it can also be affected if the Russian oil industry struggles under sanctions.
On a bearish note, oil prices dropped to more than a US dollar per barrel in Thursday’s session. This can be due to the US data showing its economy’s losing momentum.
Moreover, the Energy Information Administration (EIA) crude oil inventories gained by 8.41 million barrels in the week ended January 13. It did not meet analysts’ forecasts of -0.59 million barrels, but it is lower than the previous figures of 18.96 million.
Also, the American Petroleum Institute (API) reported a bearish 7.62-million-barrel data, disappointing market speculations of -1.75 million barrels. Still, it is lower than the former results of 14.87 million barrels.
Saudi Arabian Oil Exports Hit Fifth-Month Low
Furthermore, the Joint Organizations Data Initiative (JODI) data reported the falling crude oil exports in Saudi Arabia. It dropped by 6.30% to 7.28 million bpd in November, contrasting with October’s 7.77 million bpd record.
Also, the kingdom’s crude production plummeted to 10.47 million bpd from 10.96 million bpd.
According to analysts, the Organization of the Petroleum Exporting Countries (OPEC+), including Russia, said oil prices increased. It went up despite the group’s agreement to cut production targets to support the market.
On Tuesday, OPEC+ said that Chinese oil would rebound due to the loosening of COVID-19 restrictions. Also, the Saudi Arabian state oil producer Aramco plans on investing in petrochemicals with Chinese companies.