Oil up over 3% on Turkey terminal outage, closing gap on last week’s selloff

© Reuters.

By Barani Krishnan

Investing.com -- The outage of an oil export terminal after the earthquake in Turkey gave those long on crude the chance to push prices up sharply for a second day in a row on Tuesday, in a bid to close the gap on last week’s torrid selloff.

New York-traded West Texas Intermediate, or WTI, crude for March was up $2.66, or 3.6%, to $76.77 per barrel by 11:45 ET (16:45 GMT). 

The U.S. crude benchmark settled up 1% on Monday after plunging 7.5% last week, to a three-week low of $73.11, on recession fears and the uncertainty about the direction for U.S. interest rates after huge employment gains among Americans in January threatened to bump up inflation again. 

London-traded Brent crude for March delivery rose $2.37, or almost 3%, to $83.36, after extending the 1.3% gain from Monday. Like WTI, Brent, the global crude benchmark, tumbled 7.5% last week, touching a three-week low of $79.62.

Operations at Turkey's 1 million barrel per day (bpd) oil export terminal in Ceyhan were halted after a major earthquake hit the region, Reuters reported, adding that the facility, which exports Azeri crude oil to international markets, will be closed Feb. 6-8.

Also supporting crude prices were continued bets on ramped-up Chinese consumption as the world’s largest crude importer returns from a long Lunar New Year break, into an environment free of COVID-19 restrictions.

Adding to oil’s upside was a bold attempt by Saudi Arabia to raise for the first time in six months prices for its Asian-bound crude, also on bets over Chinese demand. The kingdom had previously ratcheted down the so-called OSP, or Official Selling Price, for its Arab Light crude to be competitive against Russia’s Urals crude, which had seen heavy discounting over the past year from Ukraine-war sanctions imposed by the West.