Oil Flat As China, Gaza Continue To Concern Pundits

Meanwhile, the U.S. become the world king of crude output: File Image/Pixabay

Oil prices on Monday were flat due to conflicting forces, including the ongoing perception of weak demand in China as well as an increase in U.S. refining.

Vandana Hari, founder of Vanda Insights, cited another element keeping prices rangebound: "The oil complex is in a wait-and-watch mode over the Gaza war and its cascading conflicts, with a question-mark over Israel's military plans, now that the Muslim holy month of Ramadan is starting without a ceasefire and hostage deal."

Traders continued to be dismayed by earlier news of China's imports of crude oil rising in the first two months of 2024 compared with the same period in 2023, since the volume was weaker than in preceding months; in Friday's session this helped oil to end the week 1.8 percent and 2.5 percent lower for Brent and West Texas Intermediate, respectively.

For Monday, Brent settled up 13 cents at $82.21 per barrel, and WTI settled down 8 cents to $77.93 per barrel.

ANZ Research analysts took a loftier view of current trading patterns, noting that the market was in a seasonal lull and that "With OPEC+ extending its voluntary production cut agreement until the end of second quarter, this could tighten the market as demand recovers."

Looking ahead, Bloomberg stated that investors are anticipating a "possible hotter-than-expected U.S. inflation read on Tuesday, which could muddy the path for monetary policy." Monthly oil market reports from the International Energy Agency, the Organization of the Petroleum Exporting Countries, and the U.S. Energy Information Administration are also forthcoming this week.

In other oil news on Monday, the EIA disclosed that the U.S. produced more crude oil than any other country in 2023, for the sixth year in a row, with production averaging 12.9 million barrels per day (bpd); this was up from the former record-breaking 12.3 million bpd in 2019.

The EIA went on to note that the only country capable of reaching this capacity is Saudi Arabia, whose state-owned Saudi Aramco recently announced it was halting output capacity expansion plans (which would have brought it up to the same rate as the U.S. by 2027).