Oil edged lower in a volatile session where sentiment was being driven by renewed worries surrounding China’s property sector.
(Bloomberg) — Oil edged lower in a volatile session where sentiment was being driven by renewed worries surrounding China’s property sector.
West Texas Intermediate fell as much as 1.5%, before paring those declines. Global markets earlier struck a risk-off tone on concerns around the debt of some developers, before rallying on news that one, Country Garden Holdings Co., is seeking to extend a maturing bond for the first time.
Crude has risen by about a quarter since its lows in June as OPEC+ linchpins Russia and Saudi Arabia curtailed supply. That’s helped push the market into a deficit of more than 2 million barrels a day this quarter, the producer group has estimated. Rising risks to flows of Russian crude through the Black Sea due to the war in Ukraine have also aided the gains.
At the same time, the outlook in the US has brightened as a growing number of economists — including the Federal Reserve’s own staff — now predict the country will escape a recession, which could buoy energy demand.
“Last week’s oil market reports confirmed that the rally in oil prices is fundamentally justified,” said Arne Lohmann Rasmussen, head of research at A/S Global Risk Management. “We see further upside and expect it is only a matter of time before Brent trades above $90.”
A snapshot of conditions in China will come on Tuesday with industrial-production figures, including for the refining industry. The country, the world’s largest crude buyer, has been opening new plants, buoying import demand.
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