Oil futures edged higher in early trade Monday, attempting to bounce after last week’s fall as investors weigh recession fears against tight crude supplies.
- West Texas Intermediate crude for November delivery CL.1, +0.20% CL00, +0.20% CLX22, +0.20% rose 37 cents or 0.4%, to $85.98 a barrel on the New York Mercantile Exchange.
- December Brent crude BRN00, +0.33% BRNZ22, +0.33% was up 50 cents, or 0.5%, at $92.13 a barrel on ICE Futures Europe.
- Back on Nymex, November gasoline RBX22, +0.01% rose 0.5% to $2.645 a gallon, while November heating oil HOX22, +1.05% was up 1.6% at $4.044 a gallon.
- November natural-gas futures dropped 4.6% to $6.159 per million British thermal units.
WTI dropped 7.6% last week, while Brent declined 6.4%, giving back a chunk of the gains scored earlier this month after the Organization of the Petroleum Exporting Countries and its allies — a group known as OPEC+ — agreed to cut production by 2 million barrels a day beginning in November.
Volatile activity in financial markets last week underlined fears of a global economic downturn that could crimp crude demand, though underlying tightness in supplies and OPEC+’s willingness to cut production despite U.S. anger were seen underpinning prices.
Uncertainty continues around demand prospects in China as it sticks to its zero-COVID policy. China’s central bank on Monday rolled over medium-term policy loans while keeping interest rates unchanged, according to Reuters, reinforcing expectations that policy will remain loose.
China on Monday unexpectedly delayed the release of its third-quarter gross domestic product figures a day before their official release, news reports said, an unusual move as the country’s ruling Communist Party begins a key political gathering.
“Prices could continue to be volatile in the near future as general economic uncertainty and investor sentiment continue to play a key role in price action while investors await macroeconomic reports and central banker speeches during the week, along with earnings reports from major Wall Street companies,” said Walid Koudmani, chief market analyst at XTB, in a note.
WTI oil futures “are hovering in an interesting technical position as they test a short-term support area around $84.50, which managed to limit the most recent downward movement,” the analyst said. “If this area is broken, it may lead to the start of a bigger move which may result in further speculation regarding the upcoming production targets set by OPEC+.”