Oil Prices Surge as Supply Worries Mount and China’s Demand Outlook Improves
By Laura Sanicola
(Reuters) – Oil prices rose for a second day on Tuesday on supply concerns after an earthquake shut down a major export terminal in Turkey and unexpectedly shut a field in the North Sea, while demand in China, the world’s largest importer, is expected to rise becomes .
Brent crude futures were up 40 cents, or 0.5%, to $81.39 a barrel by 0117 GMT, while West Texas Intermediate futures were up 43 cents, or 0.6%, to $74.54 a barrel.
Operations at Turkey’s oil terminal in Ceyhan were suspended after a powerful earthquake struck the region. The facility can export up to 1 million barrels per day (bpd) of crude oil.
The BTC terminal, which exports crude oil from Azerbaijan to international markets, will be closed Feb. 6-8 while operators assess earthquake damage, a Turkish shipping agent said.
Daniel Hynes, senior commodities strategist at ANZ Bank in Sydney, pointed in a note to the closure of Ceyhan and the closure of the 535,000 bpd Phase 1 Johan Sverdrup oil field in Norway’s North Sea region as the main drivers behind the push for higher prices.
“Signs of stronger demand have boosted sentiment,” he added.
Much of this sentiment is guided by optimism about Chinese fuel demand. The International Energy Agency (IEA) expects half of this year’s global oil demand growth to come from China, the agency’s chief said on Sunday, adding that demand for jet fuel has risen sharply.
Goldman Sachs on Monday raised its forecast for China’s oil demand for the fourth quarter of this year to 16 million barrels a day, up 400,000 barrels a day from its earlier estimate, with total annual demand in 2023 down by 1 million barrels a day will rise.
Also, price caps for Russian products went into effect on Sunday, with the Group of Seven, the European Union and Australia agreeing on caps of $100 a barrel for diesel and other products traded at a premium to crude oil, and $45 a barrel have agreed for traded products at a price reduction, e.g. B. heating oil.
(Reporting by Laura Sanicola; Editing by Christian Schmollinger)
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