Oil up over China's demand outlook, supply worries

February 7, 2023, 7:12 pm

IZMIR – Oil prices rose on Tuesday on sustained expectations of recovering demand in the world's largest oil importer, China, as well as supply concerns following two major earthquakes in Türkiye.

International benchmark Brent crude traded at $82.14 per barrel at 09:48 a.m. local time (0648 GMT), up 1.4 percent from the closing price of $80.99 a barrel in the previous trading session.

At the same time, American benchmark West Texas Intermediate (WTI) traded at $75.27 per barrel, a 1.6 percent rise after the previous session closed at $74.11 a barrel.

The positive market sentiment was extended after the head of the International Energy Agency, Fatih Birol, stated in an interview on Sunday that China is expected to account for roughly half of the growth in global oil demand this year.

"If demand goes up very strongly, if the Chinese economy rebounds, then there will be a need, in my view, for the OPEC+ countries to look at their (output) policies," Birol was quoted as saying.

A powerful magnitude 7.7 earthquake struck Kahramanmaras province's Pazarcik district early Monday morning and shook several other provinces, including Gaziantep, Sanliurfa, Diyarbakir, Adana, Adiyaman, Malatya, Osmaniye, Hatay and Kilis.

Then, at 13:24 p.m. (1024 GMT), a 7.6 magnitude earthquake centered in Kahramanmaras' Elbistan district hit the region once again.

Orhan Tatar, the risk reduction general manager of the Disaster and Emergency Management Presidency (AFAD), said the Turkish Petroleum Pipeline Company (BOTAS) halted the flow of crude oil in the region as a precaution, adding to demand concerns and pushing prices higher.

Meanwhile, markets are anticipating US Federal Reserve Chair Jerome Powell's speech on Wednesday.

Powell said last week that he expects rate hikes to continue, signaling a stronger dollar in the coming period while fueling lower demand on the global oil market. (Anadolu)