Oil prices remain steady after five days of gains

London — Oil prices were little changed on Tuesday after five sessions of gains, with weak oil data from top crude importer China balanced by concern over supply.

Brent crude futures fell 22c, or 0.26%, to $85.96 a barrel by 10.43am GMT. US West Texas Intermediate crude was down 16c, or 0.2%, at $80.30.

Bearish sentiment surrounded a contraction in China’s exports and imports in January and February, including crude imports. The decline came despite a lifting of Covid-19 restrictions, pointing to weakness in foreign demand.

“Given the high inflation in the US and Europe, demand from there should keep weakening, which also dampens processing demand in China,” said Iris Pang, ING’s chief economist for Greater China.

Price support, meanwhile, was provided by supply concerns. Chevron CEO Mike Wirth on Monday told at a Houston conference that there is “not a lot of swing capacity”, making the global market vulnerable to any unexpected supply disruption.

“The key unknown for 2023 will be the disruption to Russia’s oil and refined product exports,” Commonwealth Bank of Australia analyst Vivek Dhar said in a note.

US crude inventories could register their first decrease in 10 weeks, a Reuters poll showed before official data is published this week.

The American Petroleum Institute’s weekly report is due at 9.30pm GMT on Tuesday, with Energy Information Administration data following at 3.30pm GMT on Wednesday.

The market will also look for direction from US Federal Reserve chair Jerome Powell’s testimony before the Senate Banking Committee at 3pm GMT on Tuesday.

The focus will be on whether he remains confident that the Fed is on the right path to keep inflation on a steady decline towards its 2% target. 

Reuters