Oil prices rise as China's demand recovery offsets strong dollar

February 16, 2023 (MLN): Oil prices increased on Thursday despite the strength of the U.S. dollar and a significant build in U.S. crude inventory. Brent crude futures rose by 0.5% to $85.80 per barrel, and U.S. West Texas Intermediate (WTI) crude futures gained 0.6% to $79.07 a barrel, as Reuters reported.

The International Energy Agency (IEA) projected a record 101.9 million barrels per day of oil demand in 2023, with China accounting for almost half of the growth.

The agency also predicted that approximately 1 million barrels per day of oil production would be shut down by the end of the first quarter due to European bans and price cap sanctions.

The U.S. will likely need to increase output to make up for lower Russian output and meet global oil demand.

While rising U.S. production and swelling inventories are acting as a headwind for oil prices, strong demand revival in China and potential Russia-linked output cuts are pushing up oil prices.

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