Oil climbed as Saudi Arabia signaled confidence in the demand outlook with a surprise boost in crude prices, while investors awaited comments on monetary policy from Federal Reserve Chair Jerome Powell.
(Bloomberg) — Oil climbed as Saudi Arabia signaled confidence in the demand outlook with a surprise boost in crude prices, while investors awaited comments on monetary policy from Federal Reserve Chair Jerome Powell.
West Texas Intermediate futures rose above $75 a barrel, though came off earlier highs as the dollar pared losses. Saudi Aramco increased most of its prices for crude that will be shipped to its main market of Asia in March, amid growing optimism over a robust demand recovery in China following the end of Covid Zero.
Monday’s trading saw a host of short-term supply outages, with significant flows disrupted in Turkey and Norway. Iraq hopes to resume pumping oil through Turkey on Tuesday afternoon in the wake of two major earthquakes.
Oil has fluctuated in a relatively narrow range so far this year, with the global Brent benchmark swinging between about $80 and $90 a barrel. While traders are awaiting more signs of stronger Chinese demand, that has been offset by indications of oversupply in the near term.
Instead of cutting, Saudi Aramco “increased its official selling price for its flagship Arab Light grade to Asia in March, suggesting confidence in the demand outlook,” said Ole Hansen, head of commodities strategy at Saxo Bank A/S.
There were more strikes across France on Tuesday, with walkouts at the nation’s refineries disrupting fuel deliveries, according to TotalEnergies SE. A local union said output was also being impacted. French refinery strikes weighed on crude demand and sent refined products markets sharply higher.
A slew of events later on Tuesday may also give the market further direction. Fed Chair Powell is set to speak, while the Energy Information Administration will release its monthly oil market report.
Elements, Bloomberg’s daily energy and commodities newsletter, is now available. Sign up here.
(Corrects attribution of refinery production in penultimate paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.