Oil prices increased for a second consecutive day on Tuesday, fueled by rebounding demand in China and worries about supply issues resulting from the shutdown of a significant export facility after a powerful earthquake in Türkiye.
Brent crude futures rose $1.78, or 2.2%, to $82.77 per barrel at 1042 GMT, while West Texas Intermediate U.S. crude futures rose $1.74, or 2.4%, to $75.88 per barrel.
"Crude prices are rising on expectations that China's recovery will take hold and on supply outages from the earthquake that devastated Turkey," said Edward Moya, an analyst at OANDA.
The International Energy Agency (IEA) expects half of this year's global oil demand growth to come from China, the agency's chief Fatih Birol 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 oil demand recovery, especially from China.
Operations at Türkiye's 1 million barrel per day (bpd) oil export terminal in Ceyhan in the southern province of Adana were halted after a major earthquake hit the region. The Baku-Tbilisi-Ceyhan (BTC) terminal, which exports Azerbaijani crude oil to international markets, will be closed on Feb. 6-8.
The magnitude 7.7 and 7.6 magnitude earthquakes, centered in Kahramanmaraş, affected 10 provinces. The quakes also hit neighboring Syria.
They toppled thousands of buildings, including many apartment blocks, wrecked hospitals and left thousands injured or homeless.
The death toll in Türkiye climbed to 3,381 people, the Disaster and Emergency Management Authority (AFAD) said early Monday.
Daniel Hynes, a senior commodity strategist at ANZ bank in Sydney, also pointed to the shutdown of the 535,000 bpd Phase 1 of the Johan Sverdrup oil field in Norway's area of the North Sea as a significant driver of prices.
The oil markets will closely watch the U.S. Federal Reserve's (Fed) Chair Jerome Powell's speech on Wednesday, analysts said. Interest rate hikes typically strengthen the dollar, which could make crude more expensive for non-American buyers.
"The rebound in oil prices is more like a cautious move ahead of Fed Powell's speech tomorrow, when the Fed chairman may provide more clues on the future rate hike path," Tina Teng, an analyst at CMC Markets, said.
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 overall spending plans but scaled back ambitions to reduce oil and gas output by 2030.