LONDON — Oil prices rose on Monday, buoyed by optimism about Chinese demand, ongoing production restraints by major producers and Russia’s plans to cut supply.
Brent crude was up 59 cents, or 0.7 percent, at $83.59 a barrel by 1020 GMT. US West Texas Intermediate (WTI) crude for March, which expires on Tuesday, rose 58 cents, or 0.8 percent, to $76.92, while the more active April contract was up 0.7 percent to $77.06.
Benchmarks settled around $2 on Friday, down about 4 percent on 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) by the end of 2023.
Separately, Russia plans to cut oil production by 500,000 bpd in March, about 5 percent of its output, after the West imposed price caps on Russian oil and oil products.
Analysts, meanwhile, expect China’s oil imports to hit a record high in 2023 to meet increased demand for transportation fuel and ramp up new refineries.
“We continue to see China reopening and recovery, as well as global jet demand, which increases upside risk for prices,” said Baden Moore, head of commodity research at National Australia Bank.
China and India have become major buyers of Russian crude since the European Union embargo.
At the same time, future oil supply shortages are likely to push prices towards $100 a barrel by the end of the year, analysts at Goldman Sachs said in a Feb. 19 note.
Prices will rise “as the market returns to deficit with underinvestment, shale restrictions and OPEC discipline ensuring supply does not meet demand,” they wrote.