Meanwhile, Ritterbusch credits Russian sanctions for bolstering crude prices: File Image/Pixabay
Oil achieved a second straight weekly gain on Friday and a daily gain of over 1 percent, based mainly on earlier speculation from the International Energy Agency that China‘s lifting of Covid restrictions should bring global demand to a record high this year.
Naeem Aslam, analyst at Avatrade, said, “Many traders believe it is highly likely that we are going to see higher demand coming from China as it continues to dismantle its Covid policies.”
According to data from Vortexa Ltd. and Kpler, China’s about-face is already having an impact and benefiting other nations, namely, Iran: the Persian Gulf country’s oil exports climbed to about 1.3 million barrels per day in November and last month held near the highest in four years, most of it going to the world’s biggest oil importer under the banner of shipments from Malaysia.
Many traders believe….that we are going to see higher demand coming from China
Naeem Aslam, analyst, Avatrade
Figures from China’s customs administration show that Beijing‘s intake from the Asian nation surged to a record in December.
Oil trading on Friday was also supported by a Reuters poll predicting that the U.S. Federal Reserve will soon hold rates steady for at least the rest of the year, the sentiment fuelled by Fed vice chair Lael Brainard saying on Thursday that chances of a “soft landing” for the U.S. economy appear to be growing.
Brent settled up $1.47 or 1.7 percent at $87.63 per barrel, while West Texas Intermediate settled up 98 cents or 1.2 percent at $81.31 per barrel; for the week, Brent logged a 2.8 percent increase and WTI experienced a 1.8 percent rise.
Also on Friday, Jim Ritterbusch, president of Ritterbusch and Associates, became the latest in a long list of pundits weighing in on the efficacy of the European Union sanctions against Russia: he believed the recently imposed price cap is helping to boost crude prices, plus “Sanctions and caps on Russian crude are gradually acquiring some price impact and will become more of a bullish factor when last month’s influx of Russian crude cargoes is absorbed into the global market.”
However, it’s still debatable whether the sanctions are as effective as the EU hoped for: an executive at a tank operator and a consultant advising traders on the matter told Bloomberg on Friday that Russian oil is being blended in Singapore and then re-exported.
This in turn was given credence by vessel tracking data from Vortexa Ltd. showing that in December 2022, Singapore’s oil receiving terminals received more than twice as much Russian naphtha and fuel oil as a year ago, to the tune of 2.6 million barrels of naphtha, nearly 40 times the amount withdrawn a year earlier.