China and the USA Keep Oil Prices Above $84

Oil prices stabilized on Friday in international markets above the $84 level as signs of strengthening demand in the USA and China, the two leading global consumers, encouraged investors.

On the London market, the price of a barrel was 33 cents higher than yesterday’s closing, amounting to $84.21. On the American market, a barrel was traded at a price 42 cents higher, at $79.68.

Traders focused at the end of the week on signs of strengthening demand in the USA and China. US crude oil inventories fell by 1.4 million barrels last week, official data showed, slightly stronger than expected, thanks to increased refinery demand.

Chinese oil imports rose by 5.45% in April compared to the same period last year. Both exports and imports increased overall, signaling a recovery in domestic and foreign demand.

– A series of signs of strengthening demand in China should support commodity markets – analysts at ANZ Research noted.

At the same time, markets were concerned about Ukrainian attacks on Russian oil infrastructure as they could disrupt supply. A fire broke out at a refinery in the Kaluga region following a Ukrainian drone attack, state news agency RIA reported on Friday.

Concerns about oil deliveries are also fueled by the conflict in the Middle East. The Israeli army bombed the area of the city of Rafah in the southern Palestinian Gaza Strip on Thursday, according to testimonies from Palestinian residents, following the failure of a new round of negotiations to cease hostilities.

– Israel’s preparation for intervention in Rafah and heightened tensions on its northern border (with Lebanon – ed.) are reminders that geopolitical risks could extend into the entire second quarter of 2024 – analysts at Citi noted.

However, the bank expects a drop in prices by the end of the year, estimating that in London, the average price in the second quarter should be $86, and in the third quarter $74, given the signs of waning global demand.

The Organization of the Petroleum Exporting Countries (OPEC) separately announced that the price of a barrel of oil from its member countries rose by $1.25 on Thursday, to $84.30.