© Archyde.com. An oil field in Texas in a photo from Archyde.com archive.
(Archyde.com) – Oil prices rose on Tuesday for a second day on supply concerns following an earthquake shut down a major export terminal in Turkey and an unexpected field shut down in the North Sea, amid rising expectations of a recovery in demand in China, the world’s top crude importer.
Crude futures rose 40 cents, or 0.5 percent, to 81.39 a barrel by 0117 GMT, while US crude futures rose 43 cents, or 0.6 percent, to $74.54 a barrel.
Operations at the oil terminal in Ceyhan were halted following a strong earthquake hit the area. The terminal can export up to 1 million barrels per day of crude.
A Turkish shipping agent said the port, which exports Azerbaijanis to international markets, would be closed until February 8
While the operators are assessing the damage caused by the earthquake.
Daniel Heinz, chief commodity strategist at ANZ Bank in Sydney, noted in a note that the closure of Ceyhan and the closure of the first phase of the Johan Sverdrup field, which produces 535,000 barrels per day in the North Sea region of Norway, are among the main factors for raising prices now.
“Signs of strong demand have boosted sentiment,” he added.
Optimism regarding the recovery of Chinese fuel demand is giving an impetus to prices. The head of the International Energy Agency said on Sunday that the agency expects half of the growth in global oil demand for this year to come from China, adding that the demand for jet fuel is on the rise.
On Monday, Goldman Sachs (NYSE:) raised its forecast for China’s oil demand in the fourth quarter of this year to 16 million barrels per day, up 400,000 from its previous estimate, with total annual demand in 2023 rising by 1 million barrels per day.
Russian product price caps also came into effect on Sunday, as the Group of Seven nations, the European Union and Australia agreed to a $100-per-barrel cap for diesel and other products traded at a premium over crude oil and $45-per-barrel cap for discounted products such as fuel oil.
(Prepared by Ali Khafaji for the Arabic Bulletin)
