AIRLINK 61.51 Decreased By ▼ -0.97 (-1.55%)
BOP 5.35 Decreased By ▼ -0.01 (-0.19%)
CNERGY 4.47 Decreased By ▼ -0.11 (-2.4%)
DFML 15.40 Decreased By ▼ -0.10 (-0.65%)
DGKC 65.60 Decreased By ▼ -0.80 (-1.2%)
FCCL 17.20 Decreased By ▼ -0.39 (-2.22%)
FFBL 27.55 Decreased By ▼ -0.15 (-0.54%)
FFL 9.29 Increased By ▲ 0.02 (0.22%)
GGL 9.99 Decreased By ▼ -0.07 (-0.7%)
HBL 105.00 Decreased By ▼ -0.70 (-0.66%)
HUBC 121.02 Decreased By ▼ -1.28 (-1.05%)
HUMNL 6.51 Decreased By ▼ -0.09 (-1.36%)
KEL 4.40 Decreased By ▼ -0.10 (-2.22%)
KOSM 4.31 Decreased By ▼ -0.17 (-3.79%)
MLCF 35.66 Decreased By ▼ -0.54 (-1.49%)
OGDC 122.36 Decreased By ▼ -0.56 (-0.46%)
PAEL 22.63 Decreased By ▼ -0.37 (-1.61%)
PIAA 30.95 Increased By ▲ 1.61 (5.49%)
PIBTL 5.82 Increased By ▲ 0.02 (0.34%)
PPL 106.81 Decreased By ▼ -0.69 (-0.64%)
PRL 27.19 Decreased By ▼ -0.06 (-0.22%)
PTC 17.35 Decreased By ▼ -0.72 (-3.98%)
SEARL 52.64 Decreased By ▼ -0.36 (-0.68%)
SNGP 62.53 Decreased By ▼ -0.68 (-1.08%)
SSGC 10.59 Decreased By ▼ -0.21 (-1.94%)
TELE 9.00 Decreased By ▼ -0.20 (-2.17%)
TPLP 11.45 Increased By ▲ 0.01 (0.09%)
TRG 70.14 Decreased By ▼ -0.72 (-1.02%)
UNITY 23.42 Decreased By ▼ -0.20 (-0.85%)
WTL 1.27 Decreased By ▼ -0.01 (-0.78%)
BR100 6,915 Decreased By -28.4 (-0.41%)
BR30 22,618 Decreased By -209.5 (-0.92%)
KSE100 66,911 Decreased By -231.6 (-0.34%)
KSE30 22,015 Decreased By -74.7 (-0.34%)

Having lost nearly 10 percent in two trading sessions at the start of the year, the bear run did not last beyond that. And expectedly too, as highlighted in this space earlier, due to stronger demand signals emerging from China and a continuation of a tight supply market in the foreseeable future. Brent benchmark price in the international market has risen 5 percent month-to-date, with a 15 percent upside from the low of $77/bbl.

Reports from the ground suggest China’s economy is opening up faster showing signs of strong demand recovery, particularly from the jet fuel side. The doom and gloom over the global growth outlook seem to be playing second fiddle to the reopening of the Chinese economy, as 2Q 2023 demand from the Asian superpower is expected to be the highest for any quarter since the start of pandemic. Recall that Beijing’s borders have been opened fully for the first time in three years, and observers expect a significant increase in economic activity as a result.

On the supply front, the upcoming Opec Plus meeting start of February holds significance. Most market observers expect the cartel to stick with its earlier reduced output call. There were jitters earlier as US crude inventory rose to over a million barrels unexpectedly. Experts have attributed the rise to the historic cold snap in the US earlier in the month, disrupting the supply chain. Normalcy is expected to have returned to the fuel supply chain across much of the USA.

The upcoming embargo on Russian refined products to Europe via sea route also plays in favor of oil bulls. Curtailments in Russian oil production cannot be ruled out, which could be outside the ambit of the Opec Plus combined decision. The EU ban on refined Russian oil products comes into effect in February, and Russia could respond with further production cuts in the short run unless the demand growth from China or India makes up for the potential loss.

From all that is out there, there are no evident reasons for oil prices to slide from current levels. For the likes of Pakistan, this spells more trouble, especially after the recent round of currency depreciation. Another round of energy inflation awaits consumers in Pakistan – and this time it could be tougher than ever before.

Comments

Comments are closed.

Abdul Rehman Jan 27, 2023 12:59pm
Good article
thumb_up Recommended (0)
Abdul Rehman Jan 27, 2023 12:59pm
Good
thumb_up Recommended (0)
Abdul Rehman Jan 27, 2023 12:59pm
So useful article
thumb_up Recommended (0)
SAMIR SARDANA Jan 27, 2023 07:33pm
OIL GOING DOWN ? Y ? CHINA HAS OPENED UP ! US GDP HAS BEAT EXPECTATIONS GERMANY IS NOW "IN UKRAINE" WAR ! ISRAEL-HAMAS HOTTING UP ! CRASH IN EU GAS RATES - LOWERING UK AND EU INFL;ATION - SO SOME DEMAND RECOVERY HOPES THERE ALSO ! IF SOME DIASTER BREAKS OUT IN UKRAINE (WHICH INEVITABLE AFTER TANK SUPPLIES) AND RUSSIAN TANKERS CANNOT ENTER ASIAN WATERS - THEN WHO WILL REPLACE RUSSIAN OIL,FOR PRC AND INDIA ? SAMIR SARDANA
thumb_up Recommended (0)