Oil settles little changed; demand concerns offset Middle East tensions
Reuters
Published Feb 11, 2024 09:23PM ET
Updated Feb 12, 2024 03:36PM ET
By Scott DiSavino
NEW YORK (Reuters) -Oil futures settled little changed on Monday as concerns about interest rates and global demand caused the market to take a break after prices jumped about 6% last week on worries Middle East tensions could cause supply problems.
Brent futures fell 19 cents, or 0.2%, to settle at $82.00 a barrel. U.S. West Texas Intermediate (WTI) crude rose 8 cents, or 0.1%, to settle at $76.92.
That was the highest close for WTI since Jan. 30 for a third day in a row and put the contract up for a sixth straight day for the first time since September.
The New York Fed said its January Survey of Consumer Expectations showed the outlook for inflation a year and five years from now were unchanged, with both remaining above the Fed's 2% target rate.
If inflation worries delay Fed interest rate cuts, that could reduce oil demand by slowing economic growth.
U.S. inflation data is expected on Tuesday, while British inflation and euro zone Gross Domestic Product (GDP) data should land on Wednesday.
The International Energy Agency (IEA), which represents industrialized countries, predicted oil demand will peak by 2030, undercutting the rationale for investment. Others in the market disagreed.
France's TotalEnergies (EPA:TTEF) CEO Patrick Pouyanne said he does not see peak oil demand in the numbers, adding "we should exit debate about peak oil demand, be serious, and invest."
The Organization of the Petroleum Exporting Countries (OPEC) believes oil use will keep rising over the next two decades.
SOARING PRICES LAST WEEK
Crude benchmarks rallied about 6% last week due to persistent threats to shipping in the Red Sea, Ukrainian strikes on Russian refineries and U.S. refinery maintenance.
U.S. gasoline futures edged up about 1% on Monday to a three-month high after soaring 9% last week during refinery downtime.
The Iran-backed Houthis in Yemen have targeted shipping with drones and missiles since November in solidarity with Palestinians in Gaza. The U.S. has led retaliatory strikes on Houthi missile sites since January.
"We will again note that global crude supply has yet to be significantly disrupted by the Mideast hostilities and that rerouted oil cargoes around the Red Sea have not significantly reduced global crude supply," analysts at energy advisory Ritterbusch and Associates said.
In Gaza, Israel freed two hostages held by Iran-backed Hamas in Rafah in a ferocious rescue operation that killed 74 Palestinians in the southern Gaza city where about one million civilians have sought refuge from months of bombardments.
Elsewhere in the Middle East, Saudi Arabia's energy minister said the reason behind the kingdom's recent decision to halt its oil capacity expansion plans was the energy transition, adding it has plenty of spare capacity to cushion the oil market.
Get The News You Want
Fellow OPEC member Iraq said it was committed to OPEC's decisions and after its second voluntary cut announced in December. Iraq also said it was committed to producing no more than 4 million barrels per day.
In the U.S., meanwhile, oil output in top shale-producing regions was on track to rise in March to a four-month high, according to a federal energy outlook.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.