Oil prices extend gains following earthquake and Chinese demand rebound

Saudi Arabia raised oil prices on Asian markets for the first time in six months, expecting higher demand especially from China.
Photo: Ints Kalnins/Reuters/Ritzau Scanpix
Photo: Ints Kalnins/Reuters/Ritzau Scanpix

Oil prices edge higher on market optimism about recovering Chinese economy as well as concerns about a supply shortage following a shutdown of major Turkish export terminal after Monday’s earthquake .

Brent crude futures rose to USD 81.74 on Tuesday morning against USD 79.21 the day before. At the same time, US West Texas Intermediate (WTI) sells at USD 74.85 against USD 72.39.

The International Energy Agency (IEA) expects half of this year’s growth in global oil demand to come from China’s post-pandemic rebound, writes Reuters, citing IEA Executive Director Fatih Birol.

Saudi Arabia raised oil prices for its Asian buyers for the first time in six months in expectations of oil demand recovery, especially in China.

Daily operations in Türkiye’s oil export terminal at Ceyhan is shut down from Feb. 6-8 on account of a major earthquake hitting the nation’s southeastern region yesterday. As a result, oil supply is down while crude prices are on the rise.

Reuters cites ANZ Bank Senior Commodity Strategist Daniel Hynes for estimating that Equinor suspending output from the Johan Sverdrup oil field in Norway is a major price propeller.

On Wednesday, investors keep a close eye on a speech given by US Federal Reserve Chair Jerome Powell. If he announces a rate hike, it could very well strengthen the greenback, which all else equal will result in oil becoming more expensive for holders of other currencies. 

Elsewhere in commodities, a troy ounce gold trades at USD 1,874.10 Tuesday morning against USD 1,866.50 Monday afternoon.

English edit: Simon Øst Vejbæk

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