Oil futures: Crude nudges higher amid cautious trading
Quantum Commodity Intelligence – Crude oil futures were edging higher Wednesday, rebounding from earlier losses as benchmarks continued to see-saw amid mixed signals.
Front-month Apr24 ICE Brent futures were trading at $82.60/b (1820 GMT), compared to the day's low of $81.66/b and Tuesday's settle of $82.34/b. This left prices largely unchanged since Friday's close.
At the same time, Apr24 NYMEX WTI was trading at $77.43/b, versus Tuesday's settle of $77.04/b.
"Crude oil continues to trade flat this week as the market cautiously evaluates development in the Middle East. Sentiments remain mixed for now as geopolitical tensions offset the softer demand outlook," said Warren Patterson, head of ING's commodity research.
Persistent Houthi attacks on Red Sea shipping continued to lend support for oil pricing, although jitters over demand growth and the increasing likelihood of a delayed first US rate cut of the year are weighing sentiment.
Last week, the Paris-based International Energy Agency stuck with its forecast for modest demand growth of 1.2 million bpd this year, around 1 million bpd below OPEC's much more robust outlook, arguing that global oil demand growth is losing momentum.
"The market was reminded of the uncertain outlook for demand, with the International Energy Agency warning that growth is expected to lose its steam in 2024. It's subsequently forecasting the market to be in a surplus all year," noted ANZ commodity strategist Daniel Hynes.
The uncertain demand outlook is seen increasing the likelihood of OPEC+ extending current Q1 reductions for another quarter, with discussions between officials likely to get underway in the coming days.
Meanwhile, the US is set to announce a major package of sanctions against Russia later this week following the death of opposition leader Alexei Navalny, but it is unclear if further energy sanctions will be added with LNG shipments potentially targeted.
Data from both the American Petroleum Institute and the Energy Information Administration is delayed by 24 hours this week due to the US holiday on Monday.
