It was a day of listless swinging in the oil market that finally saw prices close lower as traders weigh US interest rates and China’s outlook to determine the direction for global energy demand.
Brent fell as signs of US economic slowdown dominated broader market sentiment, with traders fleeing risky assets. The pace of purchases of previously owned homes fell to the weakest since 2010.
Crude has traded in a tight band for much of 2023, with conflicting data points preventing the market from breaking through current resistance levels. The upside in crude prices has been limited by the threat of a recession in the US, while the downside has been protected by the recovery of the Chinese economy.
“Brent continues to ping-pong between the $80 and $85 level as the US hard landing narrative collides with China’s reopening narrative,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. “We just keep replaying the same narratives and end up where we started.”
- Brent for April settlement fell $1.02 to settle at $83.05 a barrel in New York
- WTI for March delivery, which expires Tuesday, fell 18 cents to settle at $76.16 a barrel
- There was no settlement Monday due to the US holiday and transactions will be booked Tuesday
(with assistance from Immanual John Milton)
Published at Tue, 21 Feb 2023 13:11:50 -0800