Oil prices rise on Tuesday, recouping part of Friday's decline. This is largely due to the aftermath of the devastating earthquakes in Turkey and Syria.
Brent crude for April delivery added 1.69% at $82.47 a barrel on the London ICE Futures Exchange at 12:19 London time.
The price of WTI futures for March crude oil on the electronic trading at the New York Mercantile Exchange rose by 1.79% to $75.44 a barrel by that time.
The West Texas Intermediate (WTI) for March delivery rose by 1.79% to $75.44 a barrel on the New York Mercantile Exchange.
The devastating earthquake in Turkey and Syria on Monday led to the suspension of operations at the major Turkish oil port of Ceyhan. In Syria, the largest oil refinery in Tartus province was suspended.
At the same time, the market expects economic recovery in China after the easing of quarantine restrictions in the country. China is one of the largest consumers and importers of oil, so the strengthening of its economy will also increase the global demand for oil products.
Saudi Arabia's decision to raise prices for most grades of its crude oil for Asian customers confirms the fact that demand in China is increasing. State-run Saudi Aramco stated that now the cost of Arab Light, the main type of oil supplied to Asia, will be higher by $0.2 per barrel. As a result, starting from March this oil grade will cost Asian countries $2 per barrel more expensive than oil from Oman and Dubai.
Apparently, the demand for oil in China will be somewhat higher than analysts expected. Phil Flynn, chief analyst at The Price Futures Group, notes that this fact should provide substantial support for the oil market, given investors' concerns about the amount of spare production capacity in the world.
Prior to that, Jeffrey Curry, chief commodity markets analyst at Goldman Sachs, said that reserve production capacity in the oil sector is being depleted and this could become a serious problem for the market as early as next year.
As for Russian exports, Russia's offshore oil exports declined by 140,000 bpd last week. In absolute terms, supplies amounted to 3.4 million barrels, while the monthly average rose to almost 3.5 million.
Supplies are increasing due to the diversion of pipeline supplies from the northern branch of the Druzhba pipeline and the reduction of oil refining due to the new EU sanctions.
Oil exports to Turkey, the only country in the Mediterranean that buys Russian crude, are also gradually increasing. Average deliveries for the 4th week are about 160 thousand barrels per day. Bulgaria receives another 125,000 by the Black Sea. The rest goes to Asia, mostly to India and China.
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