Oil Dips as Trading in Narrow Band Persists Despite China Uptick

Oil pared an earlier gain and remained within a recent narrow range as investors assessed more evidence of higher energy demand in China and a large build in US crude stockpiles.

(Bloomberg) — Oil pared an earlier gain and remained within a recent narrow range as investors assessed more evidence of higher energy demand in China and a large build in US crude stockpiles.

West Texas Intermediate turned lower after earlier adding 1.2%. Passenger loads at China’s top three airlines are rebounding as travel picks up again, adding to signs of increased mobility and energy consumption after refiners stepped up crude purchases and raised run rates.

That was overshadowed by a bumper build in US oil inventories on Wednesday. Crude stockpiles rose by more than 16 million barrels with key market gauges for the American market continuing to point to oversupply.

At the halfway stage of February, crude is on track for its narrowest monthly band since June 2021. Prices have been caught between expectations of more robust demand in the coming months, a Russian pledge to cut production and still uncertain output for the global economy and interest rates.

“All eyes are now on China’s comeback,” said Will Sungchil Yun, senior commodities analyst at SI Securities Corp. “Prices are likely to stay volatile in the next few weeks in the run-up to the National People’s Congress.”

China is holding its annual session of the National People’s Congress from March 5, at which fresh stimulus measures may be unveiled to bolster growth.