Oil Rebounds Over Russia Plans to Reduce Output
Oil prices increased on Tuesday as demand surged ahead of the release of fresh economic data from China, the world’s largest oil importer and second-largest consumer and Russia’s plan to cut output.
MarketForces Africa reported that Moscow announced plans to cut its oil production by 500,000 barrels per day in March, amounting to 5% of its output or 0.5% of global production.
Consequently, the International benchmark Brent crude traded at $82.59 per barrel at 9.49 a.m. local time (0649 GMT), up 0.67% from the closing price of $82.04 a barrel in the previous trading session.
At the same time, American benchmark West Texas Intermediate (WTI) traded at $76.28 per barrel, a 0.79% increase after the previous session closed at $75.68 a barrel.
While inflationary concerns in the world’s largest oil consumer, the US, continue to weigh on oil prices, investor expectations of a strong demand rebound in China, the world’s largest oil importer, are lifting market sentiment.
On Wednesday, the Purchasing Managers’ Index (PMI) for China will be released, providing an indication of how China’s economic reopening is progressing.
In an e-mailed note, Australia and New Zealand Banking Group commodity strategist Daniel Hynes said China’s mobility data shows a strong recovery in activity, with road congestion up 47% month on month in February.
‘Flight schedules remain high after the Chinese New Year holiday,’ he also said. Investors are also awaiting industrial data on crude oil inventories in the US.
The American Petroleum Institute (API) will release its forecast data on US inventories later on Tuesday, ahead of the US Energy Information Administration’s (EIA) data on oil stocks on Wednesday. On the supply side, investors are looking at the effects of Russia’s output cut of 500,000 barrels per day beginning March 1. #Oil Rebounds Over Russia Plans to Reduce Output