Oil prices rose on Friday on hopes that China, the world’s largest crude importer, would increase its demand.
Brent crude increased 0.15 percent to $78.81 a barrel at 10.00 GMT+1.
The US West Texas Intermediate crude futures also rose by 0.12 percent to $77.58 a barrel.
TheCable had reported that the price of the commodity surged to $83.77 a barrel.
The peak was sustained at $86 a barrel as at January 30, 2022, before embarking on a downward trend to $77 on Wednesday.
The latest oil price rise has been linked to the restarting of economic activities in China and the support interventions announced by the authorities for the country’s real estate sector.
“China’s reopening optimism, especially further stimulus measures to boost the property sector, is the main bullish factor for the oil prices, which has improved the demand outlook in the near year,” Tina Teng, an analyst at CMC Markets, said.
“A softened U.S. dollar has also added upside momentum to the oil markets.”
On Thursday, China announced more state support measures, including establishing a dynamic adjustment mechanism on mortgage rates for first-time home buyers, in a bid to boost its highly indebted property sector, which accounts for a quarter of the country’s economy.
In a move that could bolster oil demand, China said daily passenger flights scheduled during the upcoming Lunar New Year, starting Saturday, averages about 11,000 — 73 percent of the pre-COVID-19 level in 2019.
On Friday, transport officials said the total number of passenger trips via road, rail, water and air during the holiday season is expected to reach 2.1 billion this year, double the 1.05 billion during the same period last year.
Th Asian nation has also ended its stringent zero-COVID policy, leading to a surge in COVID infections across the country.
A DROP IN US GASOLINE INVENTORIES
Meanwhile, in the US, data from the Energy Information Administration (EIA) showed on Thursday, that distillate inventories, which include diesel and heating oil, dropped more than expected in the week to December 30.
The inventories fell by 1.4 million barrels, compared with expectations of a 396,000-barrel drop.
The US gasoline stocks fell by 346,000 barrels last week, according to the EIA data, compared with analysts’ expectations for a 486,000-barrel drop.
Edward Moya, senior market analyst at Oando, said: “Oil is trying to rally but demand concerns are keeping the gains small.”
“The Saudis are slashing prices as the short-term crude demand outlook seems like it won’t quite get a major boost from a robust China reopening.”
On Friday, Saudi Arabia, world’s top crude exporter, lowered prices for the flagship Arab light crude it sells to Asia, to its lowest since November 2021 amid global pressures hitting oil.
A POSITIVE OUTLOOK IN NIGERIA
On the flip side, Nigeria started the fiscal year optimistic that it would wipe out some bottlenecks that restrained oil earnings in 2022 and bolster crude oil production in the year.
On Thursday, Timipre Sylva, minister of state for petroleum resources, had said there was significant improvement in crude oil production, due to the government’s intervention in eradicating crude oil theft.
In November, 2022, oil output rose from 1.01 million barrels per day (bpd) to 1.18 million. But it still below the 1.8bpd quota set by Organisation of Petroleum Exporting Countries (OPEC).
Sylva had said the federal government was targeting full production capacity of up to 3 million bpd of crude, with an oil price benchmark set at $75 per barrel in the country’s 2023 budget.