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Job report affirms Fed has way to go on rates, Powell says
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IEA sees China driving global demand growth
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Saudi ups Asian flagship price for first time in 6 months
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Turkish terminal closed after earthquake
(Updates with settlement prices)
By Stephanie Kelly
NEW YORK, Feb 7 (Reuters) - Oil prices climbed more than
3% on Tuesday after the head of the U.S. central bank eased
market concerns over interest rate hikes, while recovering
demand in China also boosted prices.
Brent crude futures were up $2.70, or 3.3%, to
$83.69 a barrel, while U.S. West Texas Intermediate crude
futures rose $3.03, or 4.1%, to $77.14 per barrel.
U.S. Federal Reserve Chair Jerome Powell said on Tuesday
that very strong jobs data released last week simply affirmed
that the central bank has some way to go on raising rates.
While declining to say whether knowing about the vigor of
the data would have affected last week's 25-basis-point rate
rise, Powell told the Economic Club of Washington that the
January jobs numbers show "why this will be a process that takes
a significant period of time" when it comes to tightening
monetary policy.
The U.S. dollar index fell after the data, raising oil
prices. Interest rate hikes typically strengthen the dollar,
which could make crude more expensive for non-U.S. buyers.
Forecasted stronger demand in China also lifted crude prices
on Tuesday. The International Energy Agency expects half of this
year's global oil demand growth to come from China, the agency's
chief said on Sunday, adding that jet fuel demand was surging.
Saudi Arabia, the world's top oil exporter, raised prices
for its flagship crude for Asian buyers for the first time in
six months amid expectations of demand recovery, especially from
China.
"That seemed to send home the message that the China
reopening is real, and if Saudi Arabia is not afraid to raise
prices on oil then that means demand is pretty good," said Phil
Flynn, analyst at Price Futures Group.
In Turkey, operations at a 1-million-barrel-per-day (bpd)
oil export terminal in Ceyhan were halted after a major
earthquake hit the region. The BTC terminal, which exports Azeri
crude oil to international markets, will be closed through
Wednesday.
Iraqi crude oil loadings from storage in Ceyhan were ready
for resumption on Tuesday, but bad weather was preventing
vessels from berthing, a trade source said. Iraq's crude oil
pipeline to Turkey's Ceyhan port was still halted, the Kurdistan
Regional Government's energy ministry said.
The shutdown of the 535,000-bpd Phase 1 part of the Johan
Sverdrup oilfield in Norway's area of the North Sea also boosted
prices.
BP on Tuesday reported a record profit of $28 billion
for 2022 while boosting its dividend in a sign of confidence as
it sharply raised spending plans but scaled back ambitions to
reduce oil and gas output by 2030.
In the United States, U.S. crude production will rise in
2023 while demand will stay flat, the U.S. Energy Information
Administration (EIA) said in its Short Term Energy Outlook
(STEO) on Tuesday.
(Reporting by Stephanie Kelly in New York; additional reporting
by Ahmad Ghaddar in London and Sudarshan Varadhan in Singapore;
Editing by Mark Potter, Louise Heavens, Sharon Singleton, Will
Dunham and Paul Simao)
