Home MarketsCommodities Crude oil gains as OPEC forecasts Chinese demand to recover

Crude oil gains as OPEC forecasts Chinese demand to recover

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Crude oil futures traded higher Wednesday morning as an OPEC (Organization of the Petroleum Exporting Countries) report forecasts a recovery in oil demand in China in 2023. .

At 9:55 am Wednesday, May Brent crude futures were up 1.38% at $78.52, while April WTI crude futures were up 1.53% at $72.42.

Crude oil futures in March traded at INR 5,972 on the multi-commodity exchange (MCX) on its first day of trading, down 0.18% from the previous close of INR 5,983. 0.13 percent.

demand driver

According to OPEC’s monthly oil market report released on March 14, the forecast for global oil demand growth in 2023 remains unchanged at 2.3 million barrels per day. For China, jet/kerosene and gasoline lead demand growth, revised higher, according to the report.

China’s oil demand in the first quarter of 2023 is forecast to increase by 500,000 barrels per day from the previous year. Jet/kerosene will be the driving force behind demand recovery. With the lifting of the quarantine period for international travelers arriving in China, domestic and international airline activity is expected to increase as international business and tourism increase. This has also contributed to a recovery in jet fuel demand. Gasoline demand will also improve significantly, driven by a strong recovery in mobility, it said.

For the second quarter of 2023, the report said it expects China’s oil demand to grow by 1 million barrels per day from a year earlier. Jet fuel is expected to support air travel activity for millions of air passengers during the Golden Week holidays in May, coupled with further sluggish demand and business travelers to and from China. , added that it will again drive oil demand growth this quarter.

US inflation data released on Tuesday were in line with market expectations. This leaves the market now hopeful that the US Federal Reserve will not raise interest rates aggressively at next week’s meeting.

Aggressive interest rate hikes in the US over the past year are one of the reasons why Silicon Valley banks and signature banks failed, according to market reports. These failures caused panic in the US banking industry.

cottonseed meal, garseed gain

Natural Gas futures for March were trading at INR 213.60 on the MCX when it first traded, but last closed at INR 212.10, up 0.71%.

On the National Commodities and Derivatives Exchange (NCDEX), the cottonseed oil cake contract for March was trading at Rs 2,547 at the first trading hour on Wednesday morning.

March’s Garceed futures were trading at Rs 5,634 on NCDEX at the time of their first trade, but last closed at Rs 5,602, up 0.57%.

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