Oil rose as physical markets in the U.S. strengthened and demand from China showed signs of picking up.

West Texas Intermediate futures climbed 1.4 per cent to settle above US$77 a barrel, while Brent advanced to top $82. Trading volumes were muted as several market participants attend International Energy Week in London, a major industry gathering, where they are set to weigh the outlook for oil this year. 

US physical crude prices strengthened in recent weeks to the highs of the year as refineries benefiting from strong margins snapped up barrels and foreign buyers turned to American crude to avoid Red Sea shipping issues. 

Prices also got support from a brief shutdown in exports from an oil field in western Libya during the weekend and stepped-up US and allied strikes on Houthi targets to combat commercial shipping disruptions in the Red Sea region. 

Some positive signals on demand also are emerging. In China, a boom in travel during the Lunar New Year holidays has raised hopes of a more sustained recovery in consumption. Local refiners have been snapping up cargoes from across the world since the mid-February holiday, according to traders, as well as having increased term supplies from Saudi Arabia for March.

Traders are awaiting US inflation data that will shape expectations for when the Federal Reserve will start cutting interest rates. In wider markets, a gauge of the US currency was steady, while most other commodities, including copper, were weaker.

Oil has traded in a narrow band for the past two weeks, with tensions in the Middle East and OPEC+ supply curbs offsetting the impact of higher production from outside the group, including the US. 

“Oil prices should stay anchored near term” amid “substantial non-OPEC+ supply growth over the next few years,” Francisco Blanch, commodity strategist at Bank of America Corp., said in a report. 

The cartel and allies including Russia are widely expected to prolong their current cutbacks into the next quarter at their meeting early next month.


  • WTI for April delivery rose 1.4 per cent to settle at $77.58 a barrel.
  • Brent for April settlement was up 1.1 per cent at $82.53 a barrel.