Oil trading was sluggish, pushing the 30-day volatility level to a one-year low, with traders caught between higher energy demand in China and signs of an oversupplied market in the US .
A bumper build in US oil inventories and key indicators pointing to oversupply overshadowed a rebound in Chinese airline travel and energy consumption, halting a bull run at noon West Texas Intermediate finally settled lower for a third straight session.
“The commodity is locked in neutral as it tries to see which of the market drivers will have the most impact over the coming months,” said Rebecca Babin, senior energy trader at CIBC Private Wealth.
As of mid-February, crude oil is on track for its narrowest monthly range since June 2021, trading in a band around $8. Fluctuations have been limited amid a range of outlook scenarios stemming from factors including: stronger demand from China, a Russian pledge to cut output and a slowdown in countries trying to moderate inflation with higher interest rates.
Prices:
- WTI for March delivery fell 10 cents to settle at $78.49 a barrel in New York.
- Brent for April settlement was down 24 cents to settle at $85.14 a barrel.
