Oil prices rose in early Asian trading – today, Wednesday – after a significant drop, the last session, as strong expectations from the Organization of the Petroleum Exporting Countries (OPEC) for demand from China helped offset weak investor confidence in the wake of the collapse of Silicon Valley banks “Silicon Valley SVB” and “Signature” Americans recently.
Brent crude futures rose 62 cents, or 0.8%, to $78.07 a barrel by 00:58 GMT. US West Texas Intermediate crude rose 70 cents, or 1%, to $72.03 a barrel. Both benchmarks lost more than 4% on Tuesday, hitting three-month lows.
“The oil market has rebounded on its own after sharp losses recently,” said Toshitaka Tazawa, an analyst at Fujitomi Securities, adding that some investors took advantage of the decline to snap up deals.
height and support
OPEC’s rise in expectations for Chinese oil demand also provided support – according to Tazawa – but investors are still afraid of a broad financial crisis after the collapse of the two US banks.
Yesterday, OPEC raised its expectations for the growth of Chinese oil demand in 2023 after lifting restrictions related to the Corona pandemic in the country, but it left its forecast for the total global demand unchanged, attributing this to the risks of a possible decline in global growth.
The collapse of Silicon Valley and Signature banks raised concerns about the risks other banks faced from sharp interest rate increases by the Federal Reserve (US central bank) over the past year. It also fueled speculation that Central would slow the pace of critical tightening.
For his part, Saudi Energy Minister Prince Abdulaziz bin Salman said – in an interview with “Energy Intelligence” – yesterday that the “OPEC Plus” alliance will adhere to the production cuts agreed upon in October until the end of this year.
