Crude oil futures closed at the highest point in a week on Tuesday (7th), as China’s crude oil demand continued to be expected to recover, and the Middle East oil supply problem caused by the earthquake in Turkey found support.
A massive earthquake in Turkey and Syria on Monday killed thousands and halted operations at Turkey’s Ceyhan oil export terminal, which has a capacity of 1 million barrels per day. But Iraqi oil flow to the Ceyhan export hub resumed on Tuesday, Archyde.com reported.
energy commodity prices
- West Texas Intermediate (WTI) crude futures for March delivery rose $3.03, or 4.1%, to settle at $77.14 a barrel, the highest since Jan. 31.
- Brent futures for April delivery rose $2.70, or 3.3%, to settle at $83.69 a barrel, also reaching a one-week high.
- Gasoline futures for March delivery rose 3.5% to settle at $2.4568 a gallon.
- delivered in MarchHot Fuel FuturesPrices rose 4.9 percent to $2.9044 a gallon.
- Natural gas futures for March delivery rose 5.2% to settle at $2.584 per million Btu.
market driving force
Analysts said Saudi Arabia unexpectedly raised the price of most oil shipped to Asia, reflecting increased demand for local crude oil, thus spurring crude oil to rise on Monday morning.
Ricardo Evangelista, senior analyst at ActivTrades, said that China’s economic restart following ending the new crown virus zero policy is expected to increase demand for crude oil this year, which will help crude oil prices find support. On the other hand, a major earthquake in Turkey forced the closure of a major export terminal with a daily production capacity of 1 million barrels, exacerbating pressure on the supply side and causing oil prices to rise.
Archyde.com reported on Tuesday that flow had resumed on the Iraqi pipeline linking Turkey’s Ceyhan crude export hub, but crude exports from Azerbaijan remained halted. According to reports, an oil tanker stopped at Ceyhan terminal to load crude oil, but was unable to carry out operations due to bad weather earlier in the day.
At the same time, Evangelista pointed out that this wave of crude oil price gains has been accompanied by a stronger dollar. A stronger dollar typically weighs on dollar-denominated commodities such as crude oil, as it inflates opportunity costs for buyers using other currencies.
ICE dollar indexIt was up 1.3 percent for the month but edged down 0.2 percent on Tuesday as traders digested comments from Federal Reserve Chairman Jerome Powell. Powell told the Economic Club of Washington (Economic Club of Washington) on Tuesday that Friday’s strong U.S. jobs report showed the Fed would need to keep raising interest rates, but he also expected U.S. inflation to fall sharply this year.
The Energy Information Administration (EIA) released its monthly report on Tuesday, raising its WTI Crude Oiland Brent Crude Oilbut slashed its U.S. natural gas price forecasts for this year and next.
EIA Administrator Joe DeCarolis said that due to warmer than average temperatures, US natural gas inventories fell less than expected in January, and in response to higher natural gas inventories, we lowered our forecast for natural gas prices for the coming year.
The EIA will release its report on U.S. oil supplies for the week on Wednesday.
According to the S&P Global Commodity Insights survey, analysts expected last week (2/3) crude oil supply increased by 2.1 million barrels, gasoline supply increased by 1.6 million barrels and distillate supply increased by 100,000 barrels.