Oil prices on Monday remained range bound as analysts considered a host of bullish and bearish market signals, including ongoing Middle East tensions and high global interest rates.
Brent settled down 19 cents at $82.00 per barrel, while West Texas Intermediate settled up 8 cents at $76.92.
Worries that central banks wouldn’t cut their interest rates despite earlier suggesting they might were rekindled on Monday with the New York Fed’s January Survey of Consumer Expectations showing the inflation outlook a year and five years from now being unchanged, both remaining above the 2 percent target rate.
Meanwhile, debate was sparked after the International Energy Agency predicted that oil demand will peak by 2030, thus causing less incentive for energy companies to invest in exploration.
Patrick Pouyanne, CEO of TotalEnergies, disagreed with the peak timeline and said “we should exit debate about peak oil demand, be serious, and invest.”
As for the Middle East, analysts at Ritterbusch and Associates stated again that “global crude supply has yet to be significantly disrupted by the hostilities,” and they added that, “rerouted oil cargoes around the Red Sea have not significantly reduced global crude supply.”
China was the focus on Monday for Goldman Sachs Group, whose analysts said in a note (and citing a surge in electric-vehicle sales) that demand forecasts have additional downside risks.
Putting a cap on it all, Bloomberg summarized the current state of crude trading by noting that “Oil has traded within a band of about $10 this year as risks from the conflict in the Middle East have been partially offset by ample global supplies and a shaky demand outlook — especially in China, the second-biggest consumer.”
In other oil news on Monday, Amin Nassar, chief executive at Saudi Aramco, said shareholders will decide whether the firm will proceed with a new share offering this year.
Anonymous sources told media that Saudi Arabia wants to sell shares in Aramco on the domestic market and raise at least $10 billion from the follow-up offering, after selling 1.7 percent in the initial public offering in December 2019.