LONDON: Oil prices rose on Monday, supported by optimism about Chinese demand, continued production cuts by major producers and Russia’s plans to curb supply.
Brent crude rose 59 cents, or 0.7 percent, to $83.59 a barrel by 1020 GMT. US West Texas Intermediate (WTI) crude for March, which ends Tuesday, rose 58 cents, or 0.8 percent, to $76.92, while the more active April contract gained 0.7 percent to $77.06.
The benchmarks fell $2 on Friday for a drop of about 4 percent in the week after the United States reported higher crude oil and gasoline inventories.
The OPEC+ producer group, made up of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, agreed in October to cut oil production targets by 2 million barrels per day (bpd) through the end of 2023.
Separately, Russia plans to cut oil production by 500,000 barrels per day in March, equivalent to about 5 percent of its production, after the West imposed price caps on Russian oil and oil products.
Analysts, meanwhile, expect Chinese oil imports to reach a record high in 2023 to meet increased demand for transportation fuel and as new refineries come on stream.
“We are still seeing a reopening of China and a rebound in China and global demand for aircraft is putting upside risk to prices,” said Baden Moore, head of commodities research at National Australia Bank.
China and India have become important buyers of Russian crude oil since the embargo of the European Union.
At the same time, future oil supply shortages are likely to push prices to $100 a barrel by the end of the year, Goldman Sachs analysts said in a Feb. 19 note.
Prices will rise “as the market rolls back into deficit with underinvestment, shale constraints and OPEC discipline to ensure supply does not meet demand,” they wrote.