Oil backtracked after its best three-day stretch since December as headwinds from recession risks in the US and Europe tempered optimism over China’s emergence from Covid-Zero policies.
(Bloomberg) — Oil backtracked after its best three-day stretch since December as headwinds from recession risks in the US and Europe tempered optimism over China’s emergence from Covid-Zero policies.
“The push-pull has been ongoing since the start of the year, leaving the commodity having trouble breaking out of its range,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. “Positioning looks set up long, so data will be the driver of moves to the upside.”
Prices have swung in a $10 range since the start of 2023 with investors uncertain about the state of the US economy and the extent of China’s rebound. Major banks have said they expect a Chinese recovery to drive prices to $100 again but not until the second half of this year.
Better-than-expected flows out of Russia despite multiple energy export bans and a relatively mild winter in the northern hemisphere are keeping a lid on prices amid an uncertain economic backdrop in the US and Europe.
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