Oil prices are rising in trading on Wednesday amid continuing hopes for a rebound in demand from China after the removal of anti-coveting restrictions.
The cost of March futures on London’s ICE Futures Exchange is $86.56 per barrel by 7:13 a.m. (EET), which is $0.64 (0.74%) above the previous session’s closing price. At the close of trading on Tuesday those contracts grew by $1.46 (1.73%) to $85.92 per barrel.
The price of WTI futures for February at electronic trades of the New York Mercantile Exchange (NYMEX) is $80.83 per barrel by that time, which is $0.65 (0.81%) above the final value of the previous session. At the end of trading on Tuesday the contract grew by $0.32 (0.4%) up to $80.18 per barrel.
China’s Vice Premier Liu He announced at the World Economic Forum in Davos that China was open for global cooperation after three years of isolation caused by the COVID-19 pandemic. According to him, the peak of the coronavirus infection in the country and the economic recovery came earlier than the government expected.
China’s economy reportedly expanded by 2.9% in the fourth quarter of 2022 compared to the same period last year, according to data from the State Statistics Office (SSO). Thus, the growth rate slowed significantly from 3.9% in the third quarter.
Meanwhile, the figure exceeded analysts’ expectations, who on average predicted a 1.8% increase in Chinese GDP in October-December, Trading Economics reported.
OPEC improved its estimate of global oil demand in the first quarter of 2023 by 160,000 bpd from its previous forecast to 101.04 million bpd, the cartel’s monthly report showed.
“Slight upward adjustments were made due to an expected improvement in China’s economic performance amid its re-emerging from COVID-19 restrictions, while other regions are expected to see slight declines due to economic problems that are likely to affect oil demand,” the report said.
Meanwhile, forecasts for 2022 and 2023 remained unchanged at 99.55 million bpd and 101.77 million bpd, respectively.
Traders are now waiting for the International Energy Agency’s (IEA) monthly survey, which will be released Wednesday.
