By Adedapo Adesanya
Crude oil benchmark prices were mixed on Wednesday as weather disrupted production in United States while worrying economic growth in China raised concerns about energy demand.
Brent crude futures lost 41 cents to trade at $77.88 a barrel, while the US West Texas Intermediate crude futures (WTI) gained 16 cents to settle at $72.56 per barrel.
In North Dakota, a top oil-producing US state, below-zero degrees Fahrenheit temperatures caused oil output there to fall by 650,000 to 700,000 barrels per day.
According to government officials, the disruption was more than half its typical output.
The state’s overall production stood at about 1.27 million barrels per day, based on the latest available data from the Energy information Administration (EIA).
North Dakota is the third largest US oil producing state after Texas and New Mexico.
Earlier this week, the state reported a handful of operational issues and leaks, including an oil spill and water line leak.
Meanwhile, China’s economy in the fourth quarter expanded by 5.2 per cent year on year, missing analysts expectations and calling into question forecasts that Chinese demand will fuel 2024 global oil growth. This weakened prices.
Market analysts say the economic data doesn’t mean the end the headwinds over crude oil demand, as the Chinese outlook for 2024 and 2025 is still not positive.
However, China’s oil refinery throughput in 2023 rose 9.3 per cent to a record high, indicating elevated demand.
The market continued to observe the conflicts in the Red Sea, which so far has not supported oil prices despite mounting concern about tankers having to pause or reroute, raising shipping costs and slowing deliveries.
Tensions remained high after the US mounted fresh strikes against Iran-aligned Houthi militants in Yemen on Tuesday after their missile hit a Greek vessel.
Crude oil inventories in the US rose this week by 483,000 barrels for the week ending January 12, according to the American Petroleum Institute (API).
The API had reported a 5.215 million barrels draw in crude inventories in the week prior.
Official data from the EIA will be released on Thursday, due to the US holiday on Monday.
The International Energy Agency (IEA) expects oil markets to be balanced this year, despite Middle East tensions amid a rising supply and slowing demand growth outlook, according to its executive director, Mr Fatih Birol.
The Organisation of the Petroleum Exporting Countries (OPEC) stuck to its forecast for relatively strong growth in global oil demand in 2024.
OPEC also said that 2025 will bring a robust increase in oil use, led by China and the Middle East.
