March West Texas Intermediate crude oil posted its highest close since Dec. 1 on Thursday on hopes of increased Chinese demand. Surprisingly, traders shrugged off a second straight week of large builds in U.S. crude inventories and fear that the Federal Reserve will push the U.S. economy into recession if it continues to raise interest rates aggressively.
New Reports Put Increased Chinese Demand in Spotlight
Crude oil futures were drifting lower early Thursday on recession fears but quickly rebounded after the latest export figures published by the Joint Organizations Data Initiative showed Chinese oil demand climbed by nearly 1 million barrels per day (bpd) from the previous month to 15.41 bpd in November, the highest level since February.
The market extended its gains after International Energy Agency (IEA) head Fatih Birol said on Thursday that energy markets could be tighter in 2023, especially if the Chinese economy rebounds and the Russian oil industry struggles under sanctions.
Earlier in the week on Tuesday, OPEC said Chinese oil demand would rebound this year due to the relaxation of the country’s COVID-19 curbs and drive global growth, and it sounded an optimistic note on the prospects for the world economy in 2023.
US Crude Stockpiles Post Surprise Large Build
U.S. crude oil stockpiles last week posted a large build that took analysts by surprise, as inventories in the Cushing, Oklahoma, storage hub gained while the market…