Oil Opens Week With Drop as Traders Await Cues on Market Balance - Yahoo Finance

Oil Opens Week With Drop as Traders Await Cues on Market Balance

(Bloomberg) -- Oil edged lower after a weekly drop as traders awaited a fresh raft of clues about global crude demand and balances in March and beyond.

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Brent dipped toward $82 a barrel after losing more than 2% last week, with US counterpart West Texas Intermediate above $76. Market outlooks will come this week from International Energy Week in London, a major industry gathering. In addition, US inflation data will shape expectations for when the Federal Reserve will start cutting rates, influencing energy demand and the dollar’s path.

In wider markets, a gauge of the US currency held its ground, while most other commodities were weaker along with crude, including a decline in copper.

Crude has traded in a narrow band of about $3 a barrel for the past two weeks, with tensions in the Middle East and OPEC+ supply curbs offsetting the impact of higher production from outside the group, including the US. OPEC+ is widely expected to prolong its current cutbacks into the next quarter at its meeting early next month.

There are some positive signals on demand. In China, a boom in travel amid the Lunar New Year holidays has raised hopes of a more sustained recovery in consumption. Local refiners have been snapping up cargoes from across the world since the mid-February holiday, according to traders, as well as having increased term supplies from Saudi Arabia for March.

Among market metrics, timespreads have been holding in a bullish backwardated pattern, while prices of physical crude in the US have also been strengthening in recent weeks as buyers turned to American grades to avoid Red Sea shipping disruption.

In North Africa, meanwhile, there was a minor interruption to flows from Libya. Shipments from the 50,000-barrel-a-day Wafa oil field were halted on Sunday due to protests, a person familiar with the matter said.

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