Oil swung between gains and losses as traders took stock of the outlooks for U.S. monetary policy and Chinese consumption.
West Texas Intermediate edged higher near US$75 a barrel after earlier losing 1.1 per cent. Two Federal Reserve officials said the central bank will likely need to raise interest rates above five per cent before pausing and holding to combat inflation. The comments also weighed on Asian stocks and other commodities.
Oil rallied Monday after Beijing provided refiners and traders with a generous import quota in its second allocation for 2023, as Asia's biggest economy gears up for growth after dismantling its strict Covid restrictions late last year. That's being countered by continued indications that the market is oversupplied, with the nearest portions of the futures curves for Brent and WTI trading in a bearish contango.
“Dollar weakness and growing optimism around the China demand story has provided support to prices,” said Warren Patterson, the Singapore-based head of commodities strategy at ING Groep NV. “However, in the near term, the market still appears comfortably supplied.”Brent for March settlement was little changed at US$79.69 a barrel.
Russia will monitor international prices of its crude and use the results of its observations to limit any possible price discounts that are emerging, the country's energy ministry said, more than a month into sanctions on its crude exports. Russian oil exports made a small gain last week, but that wasn't enough to reverse a downtrend in shipments to a diminished group of buyers.
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