Oil prices fell in Asian trading, as investors weighed signs of weak supplies against persistent concerns about strong demand.
Brent crude fell towards $83 per barrel after rising 1.6% during the previous two sessions, with prices reaching the upper end of the narrow price range. WTI crude oil was trading near $78. Oil futures spreads point to a stronger market, while US crude inventories expanded less than expected last week.
Oil fell between the factors driving the rise, namely the decline in OPEC+ production and the escalation of tensions in the Middle East on the one hand, and concerns about consumption expectations from China, which is the largest importer on the other hand. As a result, futures contracts sometimes get their cues from broader stock market fluctuations.
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“Strong oil demand coupled with weak Chinese macroeconomic data has been a recurring theme,” Michael Tran, an analyst at RBC Capital Markets LLC, said in a note. “So far, the fundamental signals have been a mixed bag,” he added.
Attacks on commercial ships in the Red Sea by Houthi militants have increased the risk premium on oil futures. The group and its Iranian supporters are preparing for a long confrontation with the United States and its allies over the waterway, regardless of how the war between Israel and Hamas goes.
While US crude inventories rose less than expected, they are still high for the fourth week. Inventories at Cushing, Oklahoma, the delivery point for West Texas Intermediate crude futures, also expanded for a second week, but remain below seasonal averages.
2024-02-23 03:19:43
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