NEW YORK: Oil prices were little changed on Monday as concern eased that fighting in the Middle East would disrupt supply and Chinese data suggested weak demand, while an increase in US refining limited any selling.
Brent futures gained 16 cents at $82.24 a barrel by 1:05 p.m. EST (17:05 GMT), and US crude lost 10 cents to $77.91 per barrel. “It seems that the Middle East conflict is not high on the list of driving forces of investors, as it has not led to meaningful supply disruptions,” said Tamas Varga of oil broker PVM. “Instead, (the) focus is on the ailing Chinese economy and on rate cuts.”
Both benchmarks ended last week lower after bearish Chinese data implied weaker demand in the world’s leading crude importer. Brent closed down 1.8%, although the contract has remained above $80 a barrel for over a month.
WTI ended 2.5% lower. China’s crude oil imports rose in the first two months of the year compared with the same period of 2023, but were weaker than the preceding months, data showed on Thursday, continuing a trend of reduced purchases.
Yemen’s Iran-aligned Houthis have been attacking ships in the Red Sea and Gulf of Aden since November in what they say is a campaign of solidarity with Palestinians during Israel’s war against Hamas. Over the weekend, dozens of drones were downed by US, French and British forces in the Red Sea area after Houthis targeted bulk carrier Propel Fortune and US destroyers in the region, the US military said. On Monday, an explosion in the vicinity of a vessel 71 nautical miles southwest of Yemen’s port of Saleef was reported.
Meanwhile mixed signals from US data last week prompted some traders to adjust positions. US job growth accelerated in February, but a rise in the unemployment rate and moderation in wage gains kept the anticipated June interest rate cut on the table. US inflation data is due on Tuesday. An increase of refining activity in the United States, which could tighten global crude supplies, limited any fall in oil prices.
“The increasing refining utilization rate has the possibility of popping a storage draw for the first time this year,” Mizuho bank’s Bob Yawger said. Industry data on US crude stocks is due for release on Tuesday, while official government data is expected on Wednesday. Refinery crude runs increased 594,000 barrels per day to 15.3 million bpd in last week’s official report, while the utilization rate jumped by 3.4 percentage points to a six-week high of 84.9% of total capacity.
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