On Thursday, oil prices remained at 13-week highs, supported by strong demand in the world’s largest consumer, the United States, while demand in China is likely to increase as COVID-19 limits in key cities are eased. By 0033 GMT, Brent oil futures had risen 12 cents to $123.70 a barrel, while U.S. West Texas Intermediate crude had up 6 cents to $122.17 a barrel. Both benchmarks closed at their highest levels since March 8, matching 2008 levels.
The US saw a record drop in strategic crude reserves last week, despite rising commercial supplies, according to statistics released by the Energy Information Administration (EIA) on Wednesday.
Gasoline supplies in the United States surprisingly fell, showing that demand for motor fuel remains strong during peak times. In a note, CMC Markets analyst Tina Teng said, “China’s reopening continues to enhance demand confidence.” “On a very tight supply market, the oil price might be heading for a high in March at above $130.”
OPEC+ oil producers’ efforts to increase output are “not promising,” according to UAE energy minister Suhail al-Mazrouei, who noted that the organization is presently 2.6 million BPD short of its aim.
Last week, the group decided to expand output more quickly to rein in rising gasoline prices and curb inflation. However, manufacturers will have very limited spare capacity and little room to compensate for a big supply disruption as a result of the shift.