Oil Prices Hold Steady as Investors Await Key Data
In London, oil prices remained largely steady on Tuesday as investors eagerly awaited the release of US and China inflation data and the outcome of the Federal Reserve’s policy meeting to gauge the potential impact on demand, according to Reuters.
Brent Crude Futures Dip Slightly
Brent crude futures saw a slight decline of 14 cents, or 0.2 percent, to $81.49 per barrel by 2:21 p.m. Saudi time, easing off a recent recovery from a close of $77.52 a week earlier. This drop, marking the lowest close since February, came amidst concerns about oversupply and weakened demand heading into the rest of 2024.
US WTI Crude Futures Slip
US West Texas Intermediate crude futures also slipped by 18 cents, or 0.2 percent, to $77.56. Despite a 3 percent climb to a one-week high on Monday, driven by expectations of increased fuel demand during the upcoming Northern Hemisphere summer vacation season, some analysts predict that this price surge may be short-lived due to the likelihood of higher interest rates resulting from stronger-than-desired inflation.
Market Strategists Analyze Oil Price Trends
IG market strategist Yeap Jun Rong emphasized the need for more conviction in oil prices to sustain a recovery above the $83 level, given the prevailing downward trend since April. Traders also exercised caution ahead of the release of key macroeconomic data from China on Wednesday, with OANDA senior market analyst Kelvin Wong highlighting the potential impact of China’s Producer Price Index on oil demand.
Pressure on Prices From Multiple Factors
In addition to concerns about inflation, oversupply, and weakened demand, falling Saudi crude exports to China for the third consecutive month added further pressure on oil prices. However, the prospect of the US bolstering its strategic reserves if WTI remains below $79 offered some support, as Energy Secretary Jennifer Granholm expressed intentions to replenish the Strategic Petroleum Reserve at around $79 per barrel.