Oil prices rose for a second day on Tuesday on supply concerns after an earthquake shuttered a major export terminal in Turkey and a field in the North Sea shut unexpectedly, while demand in China, the world’s biggest importer, looks set to increase. Brent crude futures rose 40 cents, or 0.5%, to $81.39 per barrel by 0117 GMT, while West Texas Intermediate futures rose 43 cents, or 0.6%, to $74.54 per barrel.
Operations at Turkey’s oil terminal in Ceyhan halted after a major earthquake hit the region. The facility can export up to 1 million barrels per day (bpd) of crude. The BTC terminal, which exports Azeri crude oil to international markets, will be closed on Feb. 6-8 while operators assess earthquake damage, a Turkish shipping agent said.
Daniel Hynes, senior commodity strategist at ANZ bank in Sydney pointed, in a note, to the Ceyhan closure and the shutdown of the 535,000-bpd Phase 1 of the Johan Sverdrup oil field in Norway’s area of the North Sea as the main drivers for pushing prices higher.
“Signs of stronger demand boosted sentiment,” he added. Much of that sentiment is led by optimism on Chinese fuel demand. The International Energy Agency (IEA) expects half of this year’s global oil demand growth to come from China, the agency’s chief said on Sunday, adding that jet fuel demand was surging.
Goldman Sachs on Monday raised their forecast for China’s oil demand in the fourth quarter of this year to 16 million bpd, up 400,000 bpd from its earlier estimate, with overall annual demand in 2023 to rise by 1 million bpd. Also, price caps on Russian products took effect on Sunday, with Group of Seven nations, the European Union and Australia agreeing on limits of $100 a barrel on diesel and other products that trade at a premium to crude and $45 a barrel for products that trade at a discount, such as fuel oil.