Brent ended up 1.72% at $85.92 and WTI ended up 0.40% at $80.18.
Oil prices ended higher on Tuesday, driven by expectations of a Chinese economic recovery which might increase demand for oil, but also by the return of investors to the market following a long weekend in the United States.
A barrel of Brent North Sea oil for March delivery rose 1.72% to $85.92.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in February, rose 0.40% to 80.18 dollars.
“Trading volume was low on Monday due to the Martin Luther King holiday and brokers returned to the market,” commented Phil Flynn of Price Futures Group, justifying a “pretty dynamic session” on Tuesday.
“The key factor is that more and more investors realize that the recovery in activity in China is materializing” which might lead to an increase in demand, added the analyst.
The world’s largest importer of crude has indeed abandoned the last vestiges of its very strict health strategy to fight once morest COVID-19, and investors are anticipating a recovery in demand.
In addition, the organization of OPEC producing countries raised Tuesday in its monthly economic report its estimate of world growth for the year 2022 to 3% instead of 2.8% and maintained that of 2023 at 2, 5%.
“That means for 2022, crude demand has been better than we thought,” Flynn said.
The broker also saw an element of support for the price in the declarations of the secretary general of the producing countries of OPEC in Davos, Haitham Al-Ghais who pointed out, in an interview with Bloomberg Television, that “the industry must invest more to meet future demand” for black gold.
Finally, a fire which broke out on Tuesday followingnoon in a refinery in Texas, near Amarillo, causing three injuries, “might be a one-time factor in the rise in prices”, underlined the analyst from Prices Futures Group.
The price of European natural gas (the Dutch TTF) meanwhile hit its lowest since September 2021 early in the session at 51.405 euros per megawatt hour (MWh) before rising to close up 6.845% at 59.250 euros.
Gas had fallen in anticipation of an expected mild spell which should weigh on consumption, while stocks in consumer countries are fuller than on average for this period of the year.
“Weather forecasts for Europe indicated that this week’s cold snap would likely be short-lived and replaced by mild, windy weather towards the end of the month,” Energi Danmark analysts said.
The European gas reference has already fallen by around 30% since the beginning of January. And compared to its last surge in August, caused by a supply disruption from Russia, the TTF has fallen by 85%.
