After the Fed chairman allayes market concerns, oil prices jump by 3%.
Tuesday saw a major improvement in the oil market as prices increased by more than 3% as a result of many favorable events. Concerns about interest rate increases were allayed by the president of the US central bank, and demand in China also appeared to be improving.
Oil Futures are Increasing
Due to these reasons, oil futures increased to $83.51 per barrel and West Texas Intermediate futures to $76.88 per barrel at 1:07 PM EST. Lower US dollar values for non-US importers of petroleum as a result of interest rate rises, which normally strengthen the US currency.
Expected Increase in Oil Demand in China
According to the International Energy Agency, China will account for half of the increase in global oil demand this year, with demand for aviation fuel being particularly high. The world’s top oil exporter, Saudi Arabia, increased prices for Asian consumers for the first time in six months in response to these predictions.
Impact of Turkey Earthquake on Oil Operations
However, a recent earthquake in the area briefly suspended operations at a significant oil export facility in Turkey. While weather stopped ships from docking, Iraqi crude oil loadings were prepared to resume. In spite of these difficulties, BP declared an all-time high profit of $28 billion for 2022 and raised its dividend, displaying faith in the oil industry.
US Crude Production is Growing, but Demand Is Stable
According to the US Energy Information Administration (EIA), although consumption will stay same in 2023, oil output will increase in the country. The oil market is well positioned for continuing expansion and success in the upcoming year in light of these developments.