(New York) Oil prices ended higher on Thursday after three back-and-forth sessions, following the release of the first estimate of US GDP growth in the fourth quarter, which was rather reassuring for demand.
A barrel of Brent North Sea oil for March delivery rose 1.56% to $87.47.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery the same month, also rose by 1.07% to 81.01 dollars.
Investors welcomed the 2.9% annualized pace of expansion in the world’s largest economy from October to December, a stronger pace than expected. The health of the world’s largest economy directly influences demand for crude since the United States is the world’s largest consumer of black gold.
“The GDP numbers weren’t bad, the economy is growing and that’s a good thing,” responded Bill O’Grady of Confluence Investment.
“Overall, the fundamentals for the crude market are good: the dollar is weakening, China is going to be back, the sales of strategic reserves are stopping and, even if the United States is heading into a recession, it will This is the most predicted recession of my career: the market anticipated it,” he added.
As oil prices are denominated in dollars, a depreciation of the American currency encourages oil purchases.
On the China side, “investors are waiting for an index confirming that the Chinese economy is regaining its pre-pandemic dynamics”, explained Stephen Innes, analyst at SPI.
The reopening of the Chinese economy remains slowed by the continuing severity of the epidemic situation in the country. Analysts, however, predict a normalization of demand for crude oil in China, the world’s largest importer of crude oil, in the medium term.
The price of natural gas continued to decline, ending down 3.98% at 54.40 euros per megawatt hour (MWh).
“It’s mild weather. We haven’t really had a winter,” commented Bill Grady, based in the heartland of the United States in Missouri.
As for Europe, with the supply difficulties linked to the sanctions and the war in Ukraine, “the only thing they needed was a mild winter and they got it”, also claimed the analyst.
“As the saying goes in the natural gas market, by the time you reach the third week of January, winter is almost over. Because we generally know if we have enough stocks and, if so, even if the weather turns cold, we are supplied, ”he explained.