China’s Oil Demand Pushes Oil Higher

At the time of writing this report, at 10 a.m. CET, the price of a barrel of North Sea Brent oil on the European market is $86.85, while Texas WTI has once again crossed the $80 mark and costs $81.07 per barrel.

Traders were worried by data showing a decline in industrial production, producer prices, and retail sales in the United States in December, fueling fears of a recession.

“An unexpectedly strong fall in producer prices in the US, a decline in retail sales and a large drop in production last month have rekindled fears about the economic cost of raising interest rates,” said Tamas Varga from PVM, reports Mina citing a Reuters report.

Markets refocused on forecasts of demand recovery in China after the easing of corona measures.

Davos Talks

The head of the International Energy Agency (IEA), Fatih Birol, said in Davos that the supply could come closer to the demand this year, adding that he hoped that prices would not rise further to ease the pressure on developing countries.

“If the Chinese economy recovers this year, as many financial institutions expect, we could witness strong demand,” Birol said. The Russian oil industry will face major challenges in the long term.

The IEA expects record oil demand this year, warning of heightened uncertainty. According to them, the supply should slow down significantly due to Russia’s expected decline in production.

A more significant price increase stopped today, and the US crude oil stocks jumped last week. According to market sources, data from the American Petroleum Institute (API) showed they rose by some 7.6 million barrels. Analysts, on average, estimated that they fell slightly.