Crude Oil Sells for $62 as Chinese Importation Soars

By Adedapo Adesanya

The price of crude oil jumped by over 2 per cent on Friday, hitting a 13-month high on the back of news that China recorded an increase in oil imports.

During the session, the Brent crude rose by $1.44 or 2.29 per cent to sell at $62.55 per barrel, while the West Texas Intermediate (WTI) crude improved by $1.31 or 2.31 per cent to trade at $59.55 per barrel.

The level achieved yesterday was last witnessed in January 2020 before a price war between Saudi Arabia and Russia that plunged the commodity to a disturbing state.

There were reports that China’s January crude oil imports averaged 11.12 million barrels per day, up by more than 18 per cent or 1.74 million barrels per day from the December average, according to analytics group.

The country has been one of the single most bullish factors for oil prices since the pandemic hit. Thanks to the fast recovery of its economy, China has been instrumental in the oil price rebound as the world’s biggest oil importer.

China was the world’s largest oil buyer last year as it sought to fill up its reserves with cheap oil amid the pandemic. As the country continues to buy a lot of oil this year, despite higher prices coupled with falling inventories, this is good news for oil producers around the world.

Earlier, US stockpiles declined to their lowest level in 11 months last week according to the Energy Information Administration (EIA).

Meanwhile, there was also support from the Organisation of the Petroleum Exporting Countries (OPEC) which has capped its supply in February. Also, Saudi Arabia will reduce its production by 1 million barrels a day for the next few months.

However, despite this, the demand environment is still not strong enough as OPEC gave another blow to expectations to global oil demand recovery in 2021, it trimmed its forecast by 110,000 barrels per day to 5.79 million barrels per day to 96.05 million barrels per day.

The International Energy Agency (IEA), on its part, said oil supply was still surpassing global demand, though COVID-19 vaccines are expected to support a demand recovery.