In early Asian trade on Wednesday, oil prices recovered from the previous day’s drop as bullish OPEC optimism on China’s demand helped balance bearish global investor mood in the wake of the recent U.S. banking crises.
Brent crude futures climbed 85 cents, or 1.10%, to $78.30 a barrel by 9.52 A.M. (Bangkok time). U.S. West Texas Intermediate crude futures (WTI) gained 86 cents, or 1.21%, to $72.19 a barrel. The benchmarks dropped more than 4% on Tuesday, hitting a three-month low.
On Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) revised upward its 2023 prediction for Chinese oil demand growth in response to the easing of the country’s COVID-19 restrictions, but leaving the worldwide demand total unchanged owing to potential downside risks for the global economy.
Although investors were still worried about a domino financial crisis after the recent collapse of U.S. banks, analysts noted that OPEC’s upgrade in China’s oil consumption outlook still lent support.
The U.S. inflation data released on Tuesday was in line with forecasts, increasing the likelihood that the Federal Reserve would raise interest rates by a lesser amount at their meeting next week.
Energy Minister Prince Abdulaziz bin Salman of Saudi Arabia told Energy Intelligence in an interview on Tuesday that the OPEC+ group, which includes Russia and other allied oil producers, will keep the production cutbacks agreed in October through the end of the year.