Oil prices climb by $2 amid forecasts for 2023 demand uptick
Reuters
Published Dec 13, 2022 09:11PM ET
Updated Dec 14, 2022 03:40PM ET
By Laura Sanicola
(Reuters) -Oil settled up more than $2 on Wednesday after OPEC and the International Energy Agency (IEA) forecast a rebound in demand over the course of next year and as U.S. interest rate hikes are expected to ease further alongside slowing inflation.
Brent crude futures settled up $2.02, or 2.4%, to $82.70 per barrel, while U.S. West Texas Intermediate (WTI) crude futures settled up $1.94 to $77.28.
Both contracts rose on a surge in diesel futures ahead of cold weather expected towards the end of the year.
The Brent contract has returned to a backwardated market structure whereby front-month loading barrels trade higher than later deliveries, which indicates worries about oversupply are subsiding.
The structure had dipped into contango last week, with front-month deliveries cheaper than later-loading ones.
Oil prices have been supported by a leak and outage of TC Energy (NYSE:TRP) Corp's Keystone Pipeline, which ships 620,000 barrels per day of Canadian crude to the United States.
Officials said the cleanup will take at least several weeks.
Sending bearish signals, U.S. crude oil stockpiles rose by more than 10 million barrels last week, the most since March 2021, buoyed by releases from the Strategic Petroleum Reserve and as refiners reduced activity. [EIA/S]
Looking into 2023, OPEC said it expects oil demand to grow by 2.25 million barrels per day (bpd) over next year to 101.8 million bpd, with potential upside from China, the world's top importer.
The IEA, seeing Chinese oil demand recovering next year after a 400,000-bpd contraction in 2022, raised its 2023 oil demand growth estimate to 1.7 million bpd for a total of 101.6 million bpd.
Road and air traffic in China have rebounded sharply, data suggests.
"The setup remains supportive of triple digit prices ... The recent volatility presents a good entry point ahead. Balances may be looser for the next quarter, but by 2Q a new price rally will be upon us," said Oswald Clint, an analyst at Bernstein.
Get The News You Want
The Federal Reserve raised its benchmark overnight interest rate by 50 basis points on Wednesday, a downshift from the 75-basis-point hikes it had delivered at its last four policy meetings.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.