Oil swung between gains and losses as traders took stock of the outlooks for US monetary policy and Chinese consumption.
(Bloomberg) — Oil swung between gains and losses as traders took stock of the outlooks for US monetary policy and Chinese consumption.
West Texas Intermediate edged higher near $75 a barrel after earlier losing 1.1%. Two Federal Reserve officials said the central bank will likely need to raise interest rates above 5% before pausing and holding to combat inflation, while JPMorgan Chase & Co.’s Jamie Dimon said rates may have to move higher than that level. The comments also weighed on Asian stocks and other commodities.
Oil rallied Monday after Beijing 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.
“We are confident that oil prices will climb again once the current wave of Covid infections has peaked in China and economic activity picks up,” Commerzbank analysts Carsten Fritsch and Barbara Lambrecht wrote in a note.
Russia will monitor international prices of its crude and use the results of its observations to limit any possible price discounts that are emerging, the country’s energy ministry said, more than a month into sanctions on its crude exports. Russian oil exports made a small gain last week, but that wasn’t enough to reverse a downtrend in shipments to a diminished group of buyers.
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–With assistance from Yongchang Chin.
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