Improved global economic outlook could boost oil demand Oil prices rose 3 percent to a one-week high on Wednesday

Oil prices rose 3 percent to a one-week high on Wednesday as hopes for an improved global economic outlook and anticipatory concerns about the impact of Western sanctions on Russian crude production overshadowed the impact of an unexpectedly large increase in U.
S.
crude inventories
.

On Wednesday, Brent crude futures rose $2.
57, or 3.
2%, to settle at $82.
67 a barrel; U.
S.
WTI crude rose $2.
29, or 3.
1 percent, to settle at $77.
41
.
Both benchmarks closed at their highest levels since Dec.
30, with U.
S.
WTI rising for the fifth straight day for the first time since October and Brent rising
for the third straight day for the first time since December.

Global stocks rose
on expectations that U.
S.
inflation and earnings data due on Thursday would show economic resilience and lead to a slower pace of interest rate hikes.
Analysts said lower-than-expected inflation readings would push the dollar lower, which could boost oil demand as crude would be cheaper
for buyers holding other currencies.

It is worth mentioning that the Fed may raise the target rate for the last time at its rate
decision from January 31 to February 1.
HSBC said in a research note that it will raise interest rates by 50 basis points to a range
of 4.
75%-5.
00% at this monetary policy meeting.

Moreover, much of the market's optimism has been blamed on the reopening of
China, the largest oil importer.

Edward Moya, senior market analyst at data and analytics firm OANDA, said energy traders should get used to oil prices continuing to rise
.
Oil demand is picking up, and expectations are high
that Chinese demand will soar.

At the same time, Ralf Brandstaetter, head of Volkswagen China, said that by 2023, the total sales of passenger cars in China are expected to increase by 5%.

China's industrial output is expected to increase by 3.
6%
in 2022 compared with the previous year, despite the disruption of production and logistics caused by the coronavirus epidemic prevention and control measures, according to China's Ministry of Industry and Information Technology.

In contrast, the unexpected increase in U.
S.
crude inventories had less
impact on oil prices.
Crude oil inventories rose 19 million barrels last week, the third-largest weekly increase on record and the largest since a record 21.
6 million barrels in February 2021
, the U.
S.
Energy Information Administration (EIA) said.

Analysts had expected a 2.
2 million barrel decline in crude inventories, with industry data from the American Petroleum Institute (API) adding 14.
9 million barrels
.
EIA forecast this week that U.
S
.
crude oil production will reach all-time highs in 2023 and 2024.

In addition, the international price cap on Russian crude oil sales came into effect on December 5, and more restrictions on product sales will come into effect
next month as the EU continues to impose more sanctions on Russia over the escalation of the Russia-Ukraine conflict.

The EU's imminent February 5 ban on imports of petroleum products from Russian seaside could be more damaging
than the EU's December 2022 ban on crude oil imports by sea from Russia, EIA said.

In response, Russian Deputy Prime Minister Alexander Novak said that despite Western sanctions and price limits, Russian oil producers have no difficulties
in finalizing export agreements.