2024-02-26 05:40:33
Oil prices continued to fall after a week of decline, as traders await a new set of clues about global demand for crude oil and the balance of markets in March and beyond.
The price of Brent crude fell to about $82 per barrel after losing more than 2% last week, with its American counterpart, West Texas Intermediate, exceeding $76. This week’s market forecast will come from International Energy Week in London, a large industry gathering. In addition, US inflation data will shape expectations about when the US Federal Reserve will begin cutting interest rates, affecting energy demand and the path of the dollar.
More broadly, the US currency index held up, while most other commodities were weaker alongside crude oil, including copper, which witnessed a decline.
Crude oil has traded in a narrow range of around $3 per barrel over the past two weeks, as tensions in the Middle East and OPEC+ supply restrictions offset the impact of higher production from outside the group, including the United States. OPEC+ is widely expected to extend its current cuts into the next quarter at its meeting early next month.
Positive indicators
There are some positive signs about demand. In China, a travel boom amid the Lunar New Year holiday has raised hopes for a more sustainable recovery in consumption. Domestic refiners have been buying cargoes from around the world since the mid-February holiday, according to traders, in addition to increasing forward supplies from Saudi Arabia for March.
Among the market indicators, spreads remained stable in a backwardation pattern: a situation in which the price of an asset in the nearest-term contracts is higher than the market prices of futures contracts. Backorder can occur as a result of the current demand for the asset being higher than the contracts maturing in the coming months. Bullish, while actual crude prices in the United States have also risen in recent weeks as buyers shift to US crude grades to avoid shipping disruption due to Red Sea turmoil.
In North Africa, there was a short interruption in flows from Libya. An informed source said that shipments from the Al-Wafa oil field, which has a capacity of 50,000 barrels per day, were halted on Sunday due to the protests.
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