Around 10.30 a.m. GMT (11.30 a.m. in Paris), a barrel of Brent from the North Sea for delivery in March took 0.93% to 84.81 dollars. Its American equivalent, the barrel of West Texas Intermediate (WTI) for February delivery, gained 1.03% to $79.19.
For the fifth consecutive day, the oil market took advantage of “the reopening of China after several years of restrictions due to the Covid-19 virus“, commented analysts at Energi Danmark, which should boost demand from the world’s largest crude importer.
Slowing inflationary pressures
They also note that the “positive numbers” on inflation in the United States contributed to the rise in prices of the two global benchmarks for black gold. Inflationary pressures in the world’s largest economy slowed further last month. CPI inflation, a measure that refers, came out at 6.5% last month compared to December 2021, compared to 7.1% in November.
“The Federal Reserve is now expected to return to a quarter-point interest rate hike at its next meeting.“, against half a point previously, explains Stephen Brennock, of PVM Energy.
The prospect of a slowdown in interest rate hikes is weighing on the dollar, the currency in which crude is traded.
A cheaper dollar makes oil purchases more attractive.
“Normalization of Chinese demand”
“The result is that the two main markers of crude oil have more or less recouped the significant losses of the past week.“, adds Mr. Brennock, who still foresees further price increases with the “normalization of fuel demand in China“.
Over the week, the Brent and the American WTI indeed climbed by around 7%. Since early January, the two global crude benchmarks are now only recording a small loss of around 1%
