There are some signs traders have grown more optimistic on the market in recent days. Last week, money managers boosted net-bullish bets on the global Brent benchmark by the most since July 2021.
As 2023 gets under way, investors are tracking Russia’s reaction to sanctions on its energy exports, the odds the Organization of Petroleum Exporting Countries and allies may cut supply again, and the fallout in China from its swift pivot away from Covid Zero. On Tuesday WTI briefly traded above its 50-day moving average, a possible technical catalyst for further buying.
“The oil market is off to a fairly good start to the year buoyed by the faster reopening of China that should support demand amid global recession fears,” said Jens Pedersen a senior analyst at Danske Bank. “The dollar jumped on the first real trading day of the year, which should limit a further rise in oil prices.”
Prices:
- WTI for February delivery was down 0.4% at $97.91 a barrel at 10:17 a.m. in London.
Earlier, the US benchmark dropped as much as 1.2%. - Brent for March settlement dropped 0.5% to $85.50.
Hedge fund trader Pierre Andurand has been among those forecasting a surge in oil demand if the world fully emerges from Covid restrictions. Consumption has been lagging long-term trends and may rise by 3 million to 4 million barrels a day in 2023, he said last week.
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