Crude oil fluctuated as investors assessed a mixed market caught between higher energy demand from China and signs of an oversupplied market in the US.
(Bloomberg) — Crude oil fluctuated as investors assessed a mixed market caught between higher energy demand from China and signs of an oversupplied market in the US.
Oil bulls have been bolstered as Chinese airline travel and energy consumption have significantly rebounded after refiners stepped up crude purchases and raised run rates. Yet the news is overshadowed by a bumper build in US oil inventories, along with key gauges continuing to point to oversupply.
“It is not a surprise that crude has been stuck in its current trading range as the physical market remains well supplied while the imminent demand recovery in China keeps downside limited,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. “The commodity is stuck in neutral as it tries to see which one of the market drivers will be most impactful over the next couple of months.”
Halfway through February, crude is on track for its narrowest monthly channel since June 2021, trading in a range of a little over $8 per barrel. Price movements have been limited amid expectations of more robust demand in the coming months, a Russian pledge to cut production and uncertainty over global growth and the path of interest rates.
China is holding its annual session of the National People’s Congress from March 5, at which fresh stimulus measures may be unveiled to bolster growth.
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