(Bloomberg) Oil headed for a weekly gain as confidence in China’s recovery offset concern that US monetary policy is set to tighten further.West Texas Intermediate slipped below $78 a barrel, but is up almost 2% from last Friday’s close. At London’s International Energy Week gathering this week, traders struck a cautiously optimistic tone for the second half of the year, though the market remains largely rangebound in the short-term.
Crude remains caught in a range of about $10 with expectations of higher interest rates from the US Federal Reserve vying with predictions of more robust consumption from China. For the global Brent benchmark, volatility has fallen to the lowest level since 2021 as prices wrestle for meaningful direction.
“Volatility continues to be suppressed and it’s not just in oil markets but across most commodities,” said Keshav Lohiya, founder of consultant Oilytics. “It’s strange to see volatility so depressed when we have too many geopolitical risks lingering in the background.”
Prices:
WTI for April delivery fell 0.5% to $77.79 a barrel at 9:53 a.m. London time.
Brent for May settlement eased 0.5% to $84.30 a barrel.
There are some signs that mobility in China is accelerating, RBC Capital Markets analysts Michael Tran and Helima Croft wrote in a report to clients. Daily public-transit ridership is exceeding pre-Covid levels in six of the 10 major cities the bank tracks.
Some of the market’s key metrics are signaling renewed strength. The prompt spread for global benchmark Brent — the difference between its two nearest contracts — closed at the strongest since November. US benchmark WTI’s three-month spread flipped to backwardation this week for the first time this year.
Share This:
