Oil prices recovered on Thursday after beginning the year down more than 9%, the worst start in more than three decades. The comeback is the result of investors taking advantage of the dip to buy futures on the idea that long-term fuel demand will stay stable.
The rebound came after two days of sharp drops to begin 2023, as investors fretted about a possible global recession and the short-term economic indicators in the world’s two largest oil importers, the United States and China.
At 01:36 GMT, Brent oil prices were up 59 cents to $78.43 a barrel, while US West Texas Intermediate crude futures were up 69 cents to $73.53 a barrel.
“I don’t see crude hitting $60/bbl,” says David Lennox of Fat Prophets on CNBC-TV18. He predicted increased volatility in oil prices in the near future. He went on to say that the Chinese people need to be more organised when it comes to COVID.”
Prices fell in the last session as a result of economic data from the United States. Based on the Institute for Supply Management (ISM), US manufacturing dropped further in December, falling for the second consecutive month to 48.4 from 49.0 in November, the lowest level since May 2020.
As seen by market sources quoting American Petroleum Institute numbers, US crude oil stockpiles increased by 3.3 million barrels last week, while gasoline supplies increased by 1.2 million barrels. Distillate stocks decreased.
said by World Health Organization officials, no new coronavirus variants have been discovered in China.
Concerns about economic disruptions as COVID-19 passes through China, the world’s largest oil importer, have contributed to the negative outlook for crude prices.