Oil futures rose on Wednesday, March 1, after the release of the Chinese manufacturing purchasing managers’ index (PMI), which showed a remarkable increase to the highest level in 11 years. This indicates that China’s economy is rapidly recovering, which in turn will boost oil demand. China is the world’s largest oil importer.
- WTI crude futures rose by 64 cents or 0.8%, to $77.69 per barrel.
- Brent crude futures rose by 86 cents or 1%, to $84.31 per barrel.
The February manufacturing PMI for China rose from 50.1 in January to 52.6, marking the fastest expansion since April 2012. This was attributed to an increase in consumer confidence after the Chinese government announced the abolition of its zero COVID policy. The Caixin/S&P survey also showed similar results, with China’s February manufacturing PMI increasing to 51.6 from 49.2 in January, surpassing analysts’ expectations of 50.2 in a Reuters poll.
Despite the positive PMI data, oil prices were also pressured by a report from the U.S. Energy Information Administration (EIA) stating that crude inventories rose by 1.2 million barrels to 480.2 million barrels last week, which is the highest level since May 2021. Additionally, the report revealed that US crude inventories had increased for ten consecutive weeks, suggesting a decline in demand.
Concerns about oversupply also weighed on the market, as Russian oil production soared to levels before US and Western sanctions. Moreover, oil production by the Petroleum Exporting Countries (OPEC) rose in February.
The Chinese manufacturing PMI report has temporarily boosted oil prices, which were under pressure from several factors. It remains to be seen whether the positive PMI data will lead to sustained demand and rising oil prices.
The Spot Market is Open
Thursday, March 2, 2023
| Energy Updated at | USD Price | Change | %Change |
| Crude Oil 17.20 | 78.09 | +0.40 | +0.51% |