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Oil shook off an early slump at the week’s open to trade higher as investors weighed up prospects for demand ahead of a barrage of intelligence from leading energy players on the market outlook.
West Texas Intermediate rose toward US$90 a barrel after initially slumping more than 1 percent. Investors have backed away from commodities in recent months as slowing growth feeds concern that energy usage will drop, including for gasoline. That helped WTI to sink by almost 10 percent last week.
Crude has had a roller-coaster ride in 2022, soaring in the opening months of the year following Russia’s invasion of Ukraine, then sinking from June as global slowdown concerns gathered pace. Elevated inflation has prompted central banks including the US Federal Reserve to jack up interest rates, with investors wagering that more hikes remain in store this half.
Oil is “down but not out,” Goldman Sachs Group Inc. analysts including Damien Courvalin said in an August 7 note that both reduced the bank’s near-term price forecasts, while making the case for a rebound. “We continue to expect that the oil market will remain in unsustainable deficits at current prices.”
With prices just above a six-month low, investors are in line for a deluge of market commentary this week.
The US Energy Information Administration is set to issue its short-term outlook on Tuesday, followed by monthly snapshots from producer group OPEC and the International Energy Agency on Thursday.
Prices:
WTI for September delivery rose 0,7 percent to US$89,59 a barrel on the New York Mercantile Exchange at 12:20 p.m. in Singapore.
Brent for October settlement was 0,8 percent higher at US$95,69 a barrel on the ICE Futures Europe exchange.
Oil’s initial drop on Monday came despite data released at the weekend that showed China’s imports of crude rose in July from the lowest in four years as travel and transportation activity improved after Covid-19 curbs eased. – Bloomberg
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