Bullish And Bearish News Ensures Oil Will Remain Rangebound, Says Analyst

Meanwhile, China reignites hopes for an economic recovery: File Image/Pixabay

Oil prices on Monday continued their choppy trading course, with investors bombarded  by a host of headwinds, from Middle East tensions to central banks all but confirming that interest rate cuts will come later than sooner.

Also, a slight rise in the U.S. dollar capped gains, while the U.S. Presidents' Day holiday saw thinner volumes than the norm.

Brent settled up 9 cents at $83.56 per barrel, while West Texas Intermediate for March delivery rose 30 cents to $79.49 per barrel by 18:43 GMT; the WTI contract for April dipped 11 cents to $78.35 per barrel.

In the Middle East, tensions rose after attacks from Israel knocked out the Gaza Strip's second-largest hospital, and Yemen's Houthi fighters attacked an India-bound oil tanker, forcing the crew to evacuate.

In the U.S., analysts considered the impact on demand after Federal Reserve policymakers stated the need for "patience" regarding interest rate cuts; also in that country came news of a bigger than expected increase in producer prices in January, which in turn lifted the dollar.

Fawad Razaqzada, market analyst at City Index, said, "The impact of the dollar has been offsetting supportive measures such as the Middle East situation, OPEC's ongoing intervention and hopes economic conditions in China will improve in the coming quarters."

Indeed, travel in China over the Lunar New Year holiday period reportedly surpassed pre-Covid levels; however, the onslaught of bearish and bullish news of late has blunted volatility and caused Arne Lohmann Rasmussen, head of research at A/S Global Risk Management, to state  in a note, "We expect Brent to trade around the current level in the coming weeks."

In other oil news on Monday, Russia's state-run Rosneft reported a 4.27 percent increase in 2023 net profits to 1.3 trillion rubles, the equivalent of approximately $14.7 billion; however, its refinery rates dropped in February by 380,000 barrels per day compared to December, with some refineries under maintenance and others targeted by drone attacks from Ukraine.