Oil futures: Crude ends little changed after volatile session
Quantum Commodity Intelligence - Crude oil futures Tuesday were little changed after what proved another choppy trading session, with most of the volatility seen in US trading hours.
At one point prices slumped in US hours on reports TC Energy Corp had submitted a restart plan for its damaged Keystone pipeline, but rebounded ahead of the close on concerns that bad weather could hit US shale production.
Front-month February ICE Brent futures were trading at $79.90/b (1955 GMT), compared to the day's range of $78.28-$80.89/b and Monday's settle of $79.80/b.
At the same time, Feb23 NYMEX WTI was trading $76.11/b versus Monday's settle of $75.38/b, while Jan23 was trading $75.09/b heading into the expiry.
Meanwhile, concerns over China's short-term outlook amid a resurgence of Covid cases added to the broader uncertainty throughout the day.
"Energy traders might be stuck in wait-and-see mode as there might not be a clear catalyst for the next major move with crude prices," said Ed Moya, senior market analyst at brokerage Oanda.
"The oil demand outlook will be key for how high crude prices can go and that might struggle for clarity as we see mixed signals with China's reopening," added Moya.
China's abrupt and under-prepared exit from zero-Covid could lead to nearly 1 million deaths, according to a study reported by CNN, as the country braces for an unprecedented wave of infections spreading out from its biggest cities to rural areas.
While new confirmed coronavirus cases remain relatively low, there are mounting doubts over whether the official count is capturing the real number of infections, with anecdotal evidence suggesting the disease is now widespread.
China's business confidence fell to its lowest since early 2013, a survey by World Economics showed on Monday, reflecting the impact of a surge in Covid-19 cases on economic activity after the country eased pandemic control measures.
"The survey suggests strongly that the growth rate of the Chinese economy has slowed quite dramatically, and may be heading for a recession in 2023," said World Economics.
Late last week, China's top leaders and policymakers said they would focus on stabilising the economy in the upcoming year.
Oil benchmarks were moving sideways earlier in the session Tuesday but also at one stage rallied as the USD retreated, with the Dollar Index dipping below 104 points, or down 0.8% on the day.
This came after the Bank of Japan said it would let the yield on the 10-year Japanese government bond, which it has kept under its control since 2016, rise as high as 0.5% from a previous cap of 0.25%.
Traders were waiting on further news from Moscow, which said Monday it is still considering further proposals on how to further respond to the oil price cap set by "unfriendly states," Kremlin Spokesman Dmitry Peskov told reporters.
Moscow said last week it had drafted a decree that bans the sale of oil to countries that have signed up to the EU and G7's price cap, although there has been no disruption for now on Urals crude being shipped to India.
