Brent futures rangebound amid supply cuts and demand growth concerns
The front-month ICE Brent contract shed $0.23/bbl on the day, to trade at $82.47/bbl at 09.00 GMT.
PHOTO: An oil pumpjack. Getty Images
Upward pressure:
Brent futures remained elevated through the week due to growing tension in the Middle East and as the oil market factored in supply tightness.
In a further escalation of tension in the Middle East, Iran-backed Houthi rebels attacked a US warship from their base off Yemen’s coast yesterday, the US Central Command (CENTCOM) said.
Meanwhile, the decision to extend oil supply cuts of 2.2 million b/d until June-end by the OPEC+ coalition has also supported Brent’s price.
“The tightness is exacerbated by the OPEC production cuts, which are slowly making their way through the market,” ANZ Bank’s senior commodity strategist Daniel Hynes said.
Downward pressure:
Demand growth concerns in two leading oil consuming nations – China and the US – have put some downward pressure on Brent futures.
US commercial crude inventories added 423,000 bbls in the week ended 1 March, according to data released by the American Petroleum Institute (API). An increase in oil stocks has raised concerns about a slow oil demand growth in the US.
In China, the economic growth target of 5% set for 2024 and stimulus plan pledged by Chinese Premier Li Qiang failed to impress investors, analysts said.
“The market seems underwhelmed with China’s 5% growth target and its promised stimulus,” Price Futures Group’s senior market analyst Phil Flynn said.
By Aparupa Mazumder
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