Oil futures: Brent steady as market awaits details on Russian cut
Quantum Commodity Intelligence - Crude oil futures Monday were little changed as oil benchmarks consolidated firm gains from the previous week as traders wait for further details of Russia's planned production cut.
April ICE Brent futures were trading at $86.17/b (2000 GMT), compared to the day's range of $85.10-$86.64/b and Friday's settle of $86.39/b.
At the same time, Mar23 NYMEX WTI was trading $78.36/b versus Friday's settle of $79.72/b.
Both benchmarks rallied 7-8% last week, including a 2% lift on Friday after Russia said it was planning a unilateral cut of 500,000 bpd next month.
"These cuts do not change our view on the market, given that we were already assuming that Russia would have to reduce supply as a result of the EU ban on oil and refined products," said Warren Patterson, head of ING's commodity research.
However, the improved economic outlook and crude holding recent gains were taken as a bullish sign by some analysts.
"Brent crude, rangebound since November traded above its 21-day moving average on Friday, still below the trendline from the 2022 high and recent resistance in the 89 to 90 area. In our outlook, we look for Brent to spend the first quarter trading in the 80's before moving into the 90's as demand picks up," said Ole S Hansen, Head of Commodity Strategy at Saxo Group.
Prices initially eased Monday as tanker loadings of crude oil from Azerbaijan at the Mediterranean terminal of Ceyhan resumed over the weekend, having been suspended since 6 February after the devastating earthquakes last week.
Also weighing on crude markets earlier in the session was European diesel cracks tumbling to six-month lows last week as high inventories continued to weigh on margins.
Diesel cargoes delivered into the ARA port hub fell below $800/mt last Monday for the first time since January last year and compared to peaks closer to $1,500/mt seen in the weeks following the Russian invasion of Ukraine.
OPEC
OPEC remains optimistic on demand growth as the group's secretary general, Haitham Al Ghais, said Sunday he expects global oil demand to exceed pre-pandemic levels in 2023 amid an improving economic outlook in top crude importer China.
The OPEC chief also said oil demand is projected to rise further to reach 110 million barrels per day by 2025, while OPEC, in its latest monthly report, put 2023 demand growth at 2.2 million bpd.
Meanwhile, global economic growth may be reaching a "turning point", supported by falling inflation and China's reopening, International Monetary Fund managing director Kristalina Georgieva said on Sunday.
"While this is encouraging, the balance of risks remains tilted to the downside. China's recovery could stall [and] inflation could remain higher than expected," said Georgieva, who was speaking at the Arab Fiscal Forum in Dubai.
Last month, the fund raised its global economic growth estimate for this year to 2.9% from a previous forecast of 2.7%.
"China's reopening is helping, as well as resilient labour markets and consumer spending in the US and the EU," added Georgieva.
On Tuesday, the US will release its keenly-watched Consumer Price Index (CPI) report.
Elsewhere, North American oil drilling activity recovered the week ending 10 February, while oilfield services firm Baker Hughes reported that the number of rigs drilling for gas went in the opposite direction.
