Oil Down As Rudderless Traders Ignore Geopolitics, Focus On Inflation

Meanwhile, Saudi Arabia crude exports reach a multi-month high: File Image/Pixabay

With oil prices now swinging back and forth daily depending on  news headlines and with no clear trajectory ahead, crude on Monday dipped, partly due to the U.S. Federal Reserve stating it will need more data before it decides to cut interest rates.

Just several sessions ago, slower than expected inflation data caused traders to rekindle hopes that rates would be cut soon.

Philip Jefferson, the Fed's vice chair, doused these hopes on Monday when he told the Mortgage Bankers Association conference in New York, "It is too early to tell whether the recent slowdown in the disinflationary process will be long lasting."

Accordingly, Brent settled down 27 cents at $83.71 per barrel, while West Texas Intermediate settled down 26 cents at $79.80.

Addressing an issue that seems to have completely vanished from traders' radars, Warren Patterson, head of commodities strategy at ING, said, "The market also appears increasingly numb to developments on the geopolitical front, likely due to the large amount of spare capacity OPEC is sitting on."

Indeed, drone strikes on a Slavyansk refinery and a China-bound oil tanker hit by a Houthi missile in the Red Sea over the weekend registered hardly at all within the analytical community.

Bloomberg said of oil's chronically range-bound status, "That's sent a key measure of market swings to the lowest since in roughly five years: Brent's second-month rolling volatility reached the lowest levels since 2019."

In other oil news on Monday, the latest figures from the Joint Organizations Data Initiative showed that crude exports from Saudi Arabia rose by 96,000 barrels per day (bpd) in March compared to February, to reach 6.413 million bpd, the highest level in 9 months.

The Initiative also disclosed that global oil demand rose by 1.3 million bpd in March, led by China, but the demand was marginally down year-over-year in March.

Global crude oil inventories fell by 24.3 million barrels in March, while product inventories went up by 400,000 barrels.