Brent and WTI oil prices continued to go up amid tight supply and increased demand expectations in China.
US crude oil WTI is currently close to $ 81 a barrel. Yesterday, this oil price closed at a 5-week high, at 80.46 USD. Meanwhile, the price of Brent oil is currently 86.6 USD. Brent’s rally extended into the sixth session.
Yeap Jun Rong, market strategist at IG Asia (Singapore) said, “As the current support level is at the 100-day moving average, oil prices could rally to $90 a barrel”
Oil prices increase as tight supply and expectations of increased demand in China, the world’s biggest oil importer. During an energy forum in the US on March 6, Chevron CEO Mike Wirth said the oil market and logistics operations are very vulnerable if there are any supply disruptions.
The fact that Saudi Arabia – the world’s top oil exporter – raised the price of crude oil to Asia for the second month in a row, also pulled prices up. Another reason is that the USD depreciated yesterday, making crude oil cheaper for buyers in other currencies.
Investors are now waiting for the results of a two-day hearing, starting today, of US Federal Reserve Chairman Jerome Powell before the US Congress. This hearing could reveal clues about the Fed’s upcoming monetary policy.
Crude oil has experienced many fluctuations in the past year. The market struggled by many factors, from concerns that the Fed will continue to raise interest rates to optimism about demand after China ends Zero Covid. However, the fact that China has set a cautious growth target this year has dampened this optimism somewhat.
Traders are also monitoring the flow of Russian oil after the country was hit with many sanctions because of the war in Ukraine. However, the Russian economy does not seem to be affected much. Gunvor Group CEO Torbjorn Tornqvist said that Russia’s plan to reduce production by 500,000 barrels a day in March has not yet had an impact on the country’s exports.