Oil prices accelerated on positive signs about demand, amid a decline in supply due to Ukraine's attack on Russian oil refineries.
On the morning of April 2, Brent crude oil increased by 0.4% to 87.8 USD per barrel. WTI crude oil also had a new price of 84 USD per barrel. This is the highest price since the end of October 2023.
Earlier, Brent and WTI prices both rose 1% at the close of April 1. The reason was that investors predicted that the US and Chinese economies would improve, leading to higher oil demand. For example, in the US, the manufacturing index in March increased for the first time in 1.5 years.
Last week, the US Commerce Department released data showing that the personal consumption expenditures (PCE) index - the Federal Reserve's preferred inflation gauge - slowed in February, with energy and housing costs falling significantly. Most analysts believe that the PCE slowdown will help maintain the possibility of the Fed cutting interest rates in June, which will boost the economy and increase oil demand.
In China, the manufacturing index also rebounded in March. The country is now the world's largest importer of crude oil. "Chinese oil demand is the only major factor, barring geopolitical volatility, that could push fuel to new highs. A recovery in oil consumption and higher summer gasoline use could push prices to $100 a barrel," said Bob Yawger, director of energy derivatives at Mizuho.
Similarly, oil demand in Europe grew more than expected, reaching 100,000 barrels a day in February, according to Goldman Sachs, contrary to analysts’ forecasts that oil consumption in the region would fall by 200,000 barrels a day this year.
While demand is rising, oil supplies are tightening as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) cut production. Saudi Arabia , the world's top oil exporter, may raise the official selling price of its Arab Light crude in May, Reuters reported.
Russian oil companies will cut production, rather than cut exports, in the second quarter in line with OPEC+ production cuts. Ukrainian drone attacks on Russian refineries have also reduced Moscow's refining capacity.
Ha Thu (according to Reuters)
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