Brent futures broadly steady after last week's big gains

Front-month ICE Brent has gained by $0.24/bbl on the day from Friday, to $84.57/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

Emirates News Agency, the official news agency of the UAE, has quoted the country’s energy minister Suhail al-Mazrouei saying that the OPEC member is “dedicated to ensure a balanced oil market in line with its plan to advance the 5 million b/d production target to 2027.”

According to a survey of energy market professionals by Reuters’ oil analyst John Kemp, Brent is forecast to average around $90/bbl in 2023-2027.

China’s crude oil imports rose to 11.3 million b/d in December, up by 3% on the month, says ANZ commodity strategist Daniel Hynes. “This is likely to continue with Beijing issuing a fresh batch of import quotas, a signal that the world’s largest importer is ramping up to meet higher demand.”

Hopes of the US Federal Reserve slowing down its interest rate hikes is also adding mild support to Brent. A decline in US inflation could provide room to hold back.

Downward pressure:

"After the scale of the move last week, we could be seeing some profit taking," ING's head of commodities strategy Warren Patterson has told Reuters.

Oil market gains have also been capped by fears that rising Covid-19 cases in China will hurt the country's demand recovery.

Additionally, the oil markets are also focusing on evidence for and against a potential global recession, especially as world leaders and market experts gather at the World Economic Forum’s annual meeting in Davos, Switzerland to discuss the global economy.

By Konica Bhatt

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