Oil fluctuated between gains and losses as traders took stock of US monetary policy comments from Federal Reserve officials and the outlook for Chinese demand.
(Bloomberg) — Oil fluctuated between gains and losses as traders took stock of US monetary policy comments from Federal Reserve officials and the outlook for Chinese demand.
West Texas Intermediate pared losses and was nearly unchanged near $74 after earlier losing as much 1.1%. The day started on a sour note after two Fed officials said the bank will likely need to raise interest rates above 5% to combat inflation, but losses were trimmed after Fed chief Jerome Powell refrained from giving any further clues.
“Technically, the energy complex remains stuck in neutral, with a wide range for prices to swing inside of without creating a new trend,” analysts at wholesale-fuel distributor TACenergy wrote in a note to clients. “Fundamentally, the case for prices bottoming is getting stronger as lingering supply issues coincide with demand picking up both domestically and abroad.”
Oil rallied Monday after China provided refiners and traders with a generous import quota in its second allocation for 2023, as Asia’s biggest economy gears up for growth after dismantling its strict Covid restrictions late last year. That’s being countered by continued indications that the market is oversupplied, with the nearest portions of the futures curves for Brent and WTI trading in a bearish contango.
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