Oil goes up in price on Tuesday after Saudi Arabia raised prices for most grades of this energy carrier for Asian buyers.
On the eve of the state company Saudi Aramco said that the cost of the main variety of Arab Light delivered to Asia in March will increase by $0.2 per barrel. As a result it will be $2 a barrel more expensive than the oil basket of Oman and Dubai.
The price of this grade has risen for the first time since September.
The price increase for Asia is a signal of higher-than-expected demand for oil in China, said Phil Flynn, chief analyst at The Price Futures Group. “This should provide significant support for the oil market, given increasing investor fears about the amount of spare production capacity in the world,” Bloomberg quotes the expert.
The cost of April futures for Brent crude oil on London’s ICE Futures exchange is $81.74 a barrel by 7:15 a.m. Tuesday, up $0.75 (0.93%) from the previous session’s closing price. Those contracts rose $1.05 (1.3%) to $80.99 a barrel at the close of trading on Monday.
The price of WTI futures for March crude oil grew by $0.74 (1%) to $74.85 per barrel at electronic trades of New York Mercantile Exchange (NYMEX) by that time. By the close of previous trading the cost of those contracts grew by $0.72 (1%) to $74.11 a barrel.
Earlier, Goldman Sachs Group Inc. chief commodity markets analyst. Jeffrey Curry said that reserve production capacity in the oil sector, according to his estimates, is running out and this may become a serious problem for the market in 2024.
Oil prices are also boosted by fears of supply cuts from the Middle East following the earthquake in Turkey. In particular, operations at Turkey’s Ceyhan oil terminal were suspended, Bloomberg notes.
