Crude futures closed higher on Thursday (26 Jan), supported by expectations that global oil demand will see a strong recovery following China’s opening up. Markets also responded to better-than-expected US economic data, including Gross Domestic Product (GDP) figures.
- WTI crude futures rose 86 cents, or 1.07%, to settle at $81.01 a barrel.
- BRENT crude futures rose $1.35, or 1.57%, to close at $87.47 a barrel.
The US Commerce Department released its first estimate of GDP for the fourth quarter of 2022, revealing that GDP grew 2.9%, above analysts’ estimates of 2.8%. This follows a 3.2% expansion in the third quarter, driven by consumer spending.
The release of better-than-expected GDP figures eased investor concerns about a recession in the US, which had contracted 1.6% in the first quarter of 2022 and 0.6% in the second quarter.
The market also responded positively to other US economic data, including new home sales rising 2.3% to 616,000 units in December, the third straight month of increases, and durable goods orders rising 5.6% in December, surpassing analysts’ expectations of a 2.5% increase.
The market was also supported by a report by the US Energy Information Administration (EIA), which stated that US crude inventories rose by only 500,000 barrels to 448.5 million barrels last week, 1 million barrels less than analysts expected.
Analysts at UBS noted that China has announced the reopening of both arrivals and departures this month, marking the opening of the border for the first time in three years and boosting the economy and recovering oil demand.
Investors are keeping a close eye on the meeting of the Joint Committee on Ministerial Examination (JMMC) of the Petroleum Exporting Countries and Allies (OPEC Plus) on Feb. 1, as markets expect the JMMC to decide to maintain the current policy of cutting production by 2 million barrels per day until the end of 2023.
The Spot Market is Open
Friday, January 27, 2023
| Energy Updated at | USD Price | Change | Change |
| Crude Oil 10.55 | 81.32 | +0.31 | +0.38% |