Saturday, January 28, 2023

Texas oil climbed 3% to close at US$80.55 a barrel

Texas Intermediate Oil (WTI) price rose 3% this Wednesday, and recovered the US$80 barrier, standing at US$80.55 per barrel, as the market is still wary of the situation in China, the Organization of the Petroleum Exporting Countries’ The next meeting and allies (OPEC +) and the economic situation.

At the end of trading on the New York Mercantile Exchange (Nymex), the WTI futures contract for January delivery added US$2.35 from the previous day’s expiry.

US benchmark oil rose on investor hopes that Chinese authorities would lift restrictions imposed to contain the spread of Covid following protests in major cities.

On the one hand, the Chinese government should consider changing its policy, risking a surge in infections that some studies suggest will lead to a hospital collapse and thousands of deaths, or continue with its “zero covid” policy. That population has already taken its toll and, moreover, it has caused a slowdown in economic growth, disrupted supply chains and agitated financial markets.

“Oil prices were rising on optimism about the reopening in China and after another round of US economic data showed the economy is weakening but still far from recession,” said analyst at firm Oanda Ed Moya. Scaling up vaccinations of the elderly against COVID-19.

The analyst believes that if the Chinese authorities go ahead with their policy of relaxation measures against Covid and OPEC+ maintains its policy, the oil price could further increase between 5 to 10%.

Investors are also eyeing the OPEC+ meeting next week where some analysts believe it could decide on further cuts, while others think the cartel will wait to take further action once the situation in China becomes clear. Can do.

Similarly, some analysts also point to the loss of value of the dollar, the main currency for buying and selling oil, as other elements that have contributed to today’s rise.

On the other hand, the January natural gas futures contract declined 26 cents to US$6.81, and gasoline futures rose 9 cents to US$2.38 per gallon for the same month.

Nation World News Desk
Nation World News Desk
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