Oil Prices Up 1% on Supply Concerns and China Demand Hope

Oil prices rose for a second day on Tuesday on worries over supply after an earthquake in Turkey shut down a major export terminal and a field in the North Sea unexpectedly closed, and as demand in China seemed set to rise.

By 9:36 AM (Thai time), Brent crude futures had gained 75 cents, or 0.93%, to $81.74 per barrel, while West Texas Intermediate futures had risen 70 cents, or 0.94%, to $74.81 per barrel.

After a devastating earthquake hit southeastern Turkey on Monday, oil terminal operations in Ceyhan were halted. The facility has the capacity to ship out 1,000,000 bpd of crude oil per day.

According to a Turkish shipping agent, the BTC terminal, which transports Azerbaijani crude oil to foreign markets, would be closed on February 6-8 so that operators may inspect earthquake damage.

Optimism about Chinese petroleum demand is also a major driver of this optimism. In a Sunday press conference, the head of the International Energy Agency (IEA) said that China will account for half of the world’s oil demand rise this year, and that demand for jet fuel was rising rapidly.

On Monday, Goldman Sachs revised upward its estimate for China’s oil demand in the fourth quarter of this year, from 14 million bpd to 16 million bpd, with a further increase of 1 million bpd expected for the entire year.