By Yuka Obayashi
TOKYO, March 15 (Reuters) - Oil prices rose in early
Asia trade on Wednesday, recovering from the previous day's
plunge, as a stronger OPEC outlook on China's demand helped
offset bearish global investor sentiment in the wake of the
recent U.S. bank failures.
Brent crude futures climbed 62 cents, or 0.8%, to
$78.07 a barrel by 0058 GMT. U.S. West Texas Intermediate crude
futures (WTI) gained 70 cents, or 1.0%, to $72.03 a
barrel. On Tuesday, the benchmarks fell more than 4% to a
three-month low.
"The oil market has bounced back on its own after the recent
sharp losses," said Toshitaka Tazawa, an analyst at Fujitomi
Securities Co Ltd, adding some investors had taken advantage of
the slide to hunt for bargains.
"The OPEC upgrade in Chinese oil demand outlook also lent
support, though investors were still concerned over a cascading
financial crisis after the recent collapse of U.S. banks," he
said, noting that whether WTI can stay above $70 a barrel is
being closely watched.
The Organization of the Petroleum Exporting Countries (OPEC
on Tuesday further raised its forecast for Chinese oil demand
growth in 2023 due to the relaxation of the country's COVID-19
curbs, although it left the global demand total steady, citing
potential downside risks for world growth.
The failure of Silicon Valley Bank and Signature
Bank triggered concerns about risks to other banks
resulting from the U.S. Federal Reserve's sharp interest rate
hikes over the last year. That also spurred speculation about
whether the central bank could slow the pace of its monetary
tightening.
On Tuesday, the U.S. inflation data came in line with
expectations, bolstering bets on a smaller interest rate hike by
the Fed at its meeting next week.
Meanwhile, U.S. crude oil inventories rose by about 1.2
million barrels in the week ended March 10, while fuel
stockpiles fell, according to market sources citing American
Petroleum Institute figures on Tuesday.
On the supply side, Saudi Arabia's energy minister Prince
Abdulaziz bin Salman told Energy Intelligence in an interview on
Tuesday the OPEC+ alliance - OPEC and allied oil producers
including Russia - will stick to production cuts agreed in
October until the end of the year. (Reporting by Yuka Obayashi; Editing by Kenneth Maxwell)
