This week, oil prices began by trading higher, reaching 85.09 dollars per barrel on Wednesday as the shock and scale of the devastation in Turkey and Syria were realised. On Monday, a massive 7.8 magnitude earthquake wreaked havoc across the region, causing widespread devastation and damaging energy infrastructure.

The earthquake, of which the death toll stands at 21,000, initially sent oil prices higher due to the prospect that the disaster would seriously damage pipelines and other infrastructure, displacing crude from the global market for an extended period. However, by Thursday, oil prices eased back as oil infrastructure appeared to have escaped serious damage despite the scale and reach of such a serious natural disaster.

BP Azerbaijan declared force majeure on Azeri crude shipments from the Turkish port of Ceyhan on Tuesday. This means that the company is unable to fulfil its obligations due to circumstances beyond its control. Despite this declaration, BP Azerbaijan confirmed on Thursday that Azeri oil continues to flow to the port via pipeline.

Prices also softened as news of U.S. oil inventories swelled and investors worried about Federal Reserve rate hikes sent prices lower.
The Energy Information Administration reported on Wednesday that U.S. crude stocks rose last week to 455.1 million barrels, their highest since June 2021, which also pushed oil prices lower. Gasoline and distillate inventories also rose last week, according to the U.S. Energy Information Administration (EIA). The rise in inventories occurred during unseasonably mild winter months, which is typically a period of higher fuel consumption.

In addition, a strong U.S. jobs report also raised fears that the U.S. Federal Reserve would continue to aggressively hike rates to cool inflation despite speculation last week that the FED was reaching the peak of its rate increase cycle.

Furthermore, the prospect of stronger demand from China provided some support to oil prices, as the world's second-largest oil consumer ended more than three years of stringent zero-COVID policy.
"We expect Chinese oil consumption to increase by around 1.0 million barrels a day this year, with strong growth emerging as early as late in Q1," analysts from ANZ bank wrote in a note.

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