LONDON: Oil prices held broadly stable on Wednesday, as the market weighed worsening economic prospects against expectations of US crude inventory declines and plans by OPEC+ producers to reduce output.
Brent crude futures inched down 15 cents, or 0.18%, to $84.79 a barrel by 1350 GMT. West Texas Intermediate US crude was 19 cents, or 0.24%, lower at $80.52 a barrel.
US job openings in February dropped to the lowest level in nearly two years, suggesting that the labour market was cooling.
Oil price stable as markets weigh OPEC+ surprise cuts amid demand woes
“(The data) could be the first signs of weakness in the US labour market and that is huge. Without it, (the US Federal Reserve) will find it very hard to make the argument that it is pausing the tightening cycle,” said Craig Erlam, senior markets analyst at OANDA.
Traders will be looking for cues on broader economic trends from US non-farm payrolls data due this week, as weak economic data from the US and China raise demand fears.
“The present raises concerns about healthy economic expansion as Chinese, euro zone and US manufacturing activity slowed last month,” said Tamas Varga of oil broker PVM.
Record Russian diesel flows to the Middle East in March and the sluggish performance of middle distillates contracts have “acted as a brake on any attempt to push crude oil prices meaningfully higher”, Varga said.
Markets saw some support, however, from an industry report showing US crude inventories fell by about 4.3 million barrels in the week ended March 31.
The official inventory report by the US Energy Information Administration is due at 1430 GMT on Wednesday.
Prices also continued to be underpinned by voluntary cuts pledged by OPEC+ which groups Organization of the Petroleum Exporting Countries members and allies including Russia.
“The decision by OPEC+ to voluntarily cut crude supplies from May onwards has come as a surprise to many, considering that the global crude balance was already expected to become increasingly tight over the summer months, something that will certainly help keep crude prices supported,” Kpler crude analyst Johannes Rauball said.
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