By Adedapo Adesanya
Crude oil prices moderated on Thursday as oil infrastructure appeared to have escaped serious damage from the earthquake that devastated parts of Turkey and Syria.
Brent crude futures dropped 59 cents or 0.7 per cent to $84.50 a barrel, and the West Texas Intermediate (WTI) crude futures dropped 41 cents or 0.5 per cent to $78.06 per barrel.
The earthquake, which has killed more than 19,000 people, initially sent oil prices higher on the prospect that the disaster would seriously damage pipelines and other infrastructure and displace crude from the global market for an extended period.
BP Azerbaijan declared force majeure on Azeri crude shipments from the Turkish port of Ceyhan on Tuesday after the quake struck early on Monday. However, Azeri oil continues to flow there via pipeline, BP Azerbaijan said on Thursday.
Meanwhile, US crude inventories swelled just as investors worried about the country’s central bank, the Federal Reserve, rate hikes.
Crude stocks rose last week to 455.1 million barrels, their highest since June 2021, the Energy Information Administration (EIA) reported on Wednesday, which also pushed oil prices lower.
The prospect of stronger demand from China provided some support to oil prices, as the world’s second-largest oil consumer ended more than three years of the stringent zero-COVID policy.
A strong US jobs report raised fears that the US Federal Reserve would continue to aggressively hike rates to cool inflation, pressuring risk assets like oil.
Analysts expect Chinese oil consumption to increase by around 1.0 million barrels a day this year, with strong growth emerging as early as late in the first quarter.
If this happens, it should push global demand up by 2.1 million barrels a day in 2023.
The losses were limited by a weaker US Dollar as the Dollar index fell 0.7 per cent to 102.74. A weaker US Dollar, which typically trades inversely with oil, makes the commodity cheaper for holders of other currencies.
Modupe Gbadeyanka