Oil holds run of weekly drops with focus on demand outlook - Yahoo Finance

Oil Halts Run of Weekly Drops With Focus on Demand Outlook

(Bloomberg) -- Oil rose after three weeks of declines with traders on edge over forward-looking inflation data and industry reports that will confirm whether the recent run lower has been overdone.

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West Texas Intermediate climbed to trade just below $78 after losing about 13% over the past three weeks. A bottleneck of trade data rendered oil directionless at times, with weak demand numbers commanding price changes. The Organization of Petroleum Exporting Countries said in its monthly outlook that such “overblown negative sentiment” had driven prices lower, but that recent data shows fundamentals are healthy and global economic growth is robust.

The International Energy Agency will publish its snapshot on Tuesday and there will also be two weeks’ worth of US inventory data later in the week. Later Monday, traders will be taking cues from US consumer inflation expectation data released by the Federal Reserve.

A rise in inflationary data will most likely “push US interest rates higher, which is bullish to the US dollar, but another headwind for crude,” said Dennis Kissler, senior vice president for trading at BOK Financial Securities. Conversely, calming inflation data may see crude “underpriced given the latest sell off.”

Oil rebounded slightly at the end of last week after Wednesday slipping below $75 for the first time since July, with bearish consumption signals from China, the US and Europe prevailing. Supply from the Middle East — the source of about a third of the world’s crude — has remained unaffected by the conflict between Israel and Hamas, while shipments from Russia and the US are increasing.

In a move that could add further barrels to the market, Iraqi Oil Minister Hayyan Abdul Ghani is visiting the Kurdistan region to discuss the resumption of exports via Ceyhan in Turkey. The major pipeline has been halted since March because of a dispute between Turkey and Iraq and was also damaged by an earthquake.

Terminal users can click here for more on the Israel-Hamas War.

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