Oil fell in a volatile session that was rocked by a flurry of supply and demand data and a sharply stronger dollar.
West Texas Intermediate pared sharp losses after U.S. data showed total crude inventories rose to their highest level since the summer of 2021. The International Energy Agency on Wednesday raised the its forecast for global oil demand this year as China reopens its economy, echoing OPEC’s more dovish outlook. day before Meanwhile, a strong dollar pressured almost all commodities downward, limiting the ability of the touches to break out.
“The demand trajectory is improving and the supply trajectory is not,” said Josh Young, chief investment officer at Bison Interests. “China has been buying more physical oil over the past two weeks or so. Oil bears are taking this as a sign that China is gradually reopening.”
Traders appeared to shrug off the Energy Information Administration’s report as it was accompanied by the highest adjustment figure on record. This number indicates the difference between reported stocks and those implied by production, refinery demand, imports and exports. A large week-to-week fluctuation raises questions among some traders about the accuracy of the numbers.
Despite the daily moves, crude remains stuck in a $10 range this year, caught between the risk of a recession hitting global governments and continued optimism around Chinese demand. Smaller macro-related fluctuations have sent prices up and down, but prices remain in a narrow band as the market remains fairly balanced until a slowdown or reopening of China takes effect.
Prices:
- WTI for March delivery fell 47 cents to settle at $78.59 a barrel in New York.
- Brent for April settlement lost 20 cents to settle at $85.38 a barrel.
(with help from Chunzi Xu)
