Oil prices surges again after slumping last week

Crude oil prices returned for gains in Asian trading on Monday after falling $2 a barrel at Friday’s close, as increased supplies in the United States and expectations of higher interest rates limited optimism about China’s demand recovery.

The increase happened after OPEC and the International Energy Agency raised their demand forecasts for the year. Both Brent crude and WTI declined at closing last week by around a percentage of 4 percent.

Brent crude’s price has increased by 53 cents or 0.64 percent, to reach 83.53 dollars per barrel by 4:11 GMT and WTI was changing hands for more than $79 per barrel.

Washington also announced plans to withdraw 26 million barrels of crude oil from the strategic petroleum reserve. This will lead to an increase in stockpiles in Cushing, Oklahoma, which is a point of handing out contracts of the WTI until May.

Fatih Birol, Head of IEA, warned of a possible decline in energy next winter due to the arrival of a relatively small amount of new liquefied gas to the market. He also predicted a Chinese increase in the intake this year.

Birol told Reuters during the Munich Security Conference on Saturday, that the European governments made a number of right decisions last year to secure energy supplies.

European governments were lucky to face a mild winter this year, in addition to the Chinese economic slump which lead to the first decline in its intake in 40 years, Birol added.