Oil prices fluctuated between gains and losses in anticipation of US inventory data, with global benchmark Brent inching towards $79 a barrel in a steadfastly rangebound market. The situation was influenced by the Chinese government’s plans to stimulate its economy, a weakening dollar making commodities more attractive, and broader equity gains.
The American Petroleum Institute reported a nearly 7 million-barrel decline in nationwide US stockpiles, including a decrease at the key Cushing hub in Oklahoma. Official figures were awaited on Wednesday. Despite geopolitical risks, particularly in the Middle East, the market remained confined to a narrow range due to expectations of increased supplies from non-OPEC producers.
Gunvor Group Ltd., a major crude trader, anticipated that the first half of the year would see dominance in non-OPEC output growth, eventually plateauing, and markets remaining stagnant. Standard Chartered analysts noted that the impact of geopolitical risk has been limited so far, but if the usual seasonal demand upswing lessens the bearish consensus, geopolitics could have a more magnified effect on prices.
Traders were closely monitoring US-led strikes targeting vessel attacks by Iran-backed Houthis in Yemen, including Central Command hitting two anti-ship missiles in the Red Sea. Additionally, US forces carried out airstrikes on a Tehran-backed militia in Iraq, contributing to the overall market uncertainty.
