Oil closes higher; Brent crosses $86

Oil drilling rigs

Oil closed higher today, March 18, on hopes of recovery in the second largest economy in the world. In addition, prices were affected by renewed geopolitical concerns with the continuing attacks by Ukraine on Russian energy facilities, which may limit refining capacity.

Brent crude futures for May delivery rose 1.8%, or $1.55, to close at $86.89 per barrel—the highest settlement since Oct. 20, 2023 ($87.23).

WTI crude for May delivery (the most active contract) rose 1.95%, or $1.58, to $82.16 per barrel—also the highest settlement since Oct. 20, 2023 ($82.73).

“Preliminary estimates suggest that approximately 15% of Russia’s refining capacity has been disrupted in recent days, potentially leading to a short-term decrease in crude oil exports as authorities seek to mitigate the impact of the disruptions,” Stephen Innes, Managing Partner at SPI Asset Management, said in a note, according to MarketWatch report.

Economic data showed that China's industrial production grew by 7% in January and February, up from 6.8% in December and compared to expectations of 5.3% growth. Retail sales increased in line with expectations of 5.5% growth after rising 7.4% in December.

Chinese oil demand during the first two months of this year rose by 6.1% to 14.36 million barrels per day, supported by Lunar New Year holiday travel, Bloomberg data showed.