Oil settled higher after falling to an intraday low since early December, with technical indicators indicating the commodity was oversold.
West Texas Intermediate posted its first positive result in four sessions. Rising crude stockpiles made the market vulnerable to a downside shift in broader sentiment, sending oil prices briefly below the lower Bollinger band. Crossing the lower band is a technical signal that an oversold threshold has been breached, prompting traders to reduce selling.
Factors supporting crude include a major earthquake in Turkey halting oil flows at the Ceyhan export terminal, which ships more than 1 million barrels a day, and a technical failure at the giant Johan field Norway’s Sverdrup cut production there.
Prices endured a bumpy January, rising on China’s end of its Zero Covid policies and falling on US inventory building. Continued uncertainty about how both countries will fare is fueling much of the consternation among investors. In the longer term, China is the most important factor, as the scale and speed of its reopening will be key for traders, but other factors are altering the short-term outlook.
“I can be the biggest bull based on a bunch of futures,” but then there are stock accumulations to consider, said Vikas Dwivedi, global oil and gas strategist at Macquarie. “That’s the tension right now.”
Prices:
- WTI for March delivery rose 72 cents to settle at $74.11 a barrel in New York.
- WTI tested its Bollinger Band below $73 a barrel, indicating that futures are about to be oversold.
- Brent for April settlement rose $1.05 to $80.99 a barrel.
(with the help of Julia Fanzeres)
