Oil prices dip ahead of US inflation data

March 11, 2024 (MLN): Oil prices fell ahead of the US inflation data, which is projected to indicate elevated levels.

Brent crude traded near $81.58 per barrel, down by 0.61% on the day.

While West Texas Intermediate crude (WTI) was at $77.48 per barrel, down by 0.68% on the day.

Prices still remain in a tight trading range. Investors are watching for a possible hotter-than-expected US inflation read on Tuesday, which could muddy the path for monetary policy, reported Bloomberg.

Oil is coming off its least volatile week since late 2021 as the market juggles competing bullish and bearish factors.

OPEC+ production cuts and Middle East tensions are being offset by rising supply from outside the group and persistent concerns around the economic outlook for top importer China.

Investors are also keeping an eye on cease-fire talks between Israel and Hamas, which remain deadlocked.

Israel has threatened to invade the city of Rafah in southern Gaza if discussions fail, which US President Joe Biden has warned would represent a “red line.”

“We see the current price level as just about right for the present demand and supply dynamics,” said Han Zhong Liang, an investment strategist at Standard Chartered Plc.

“Unless there’s a significant shift in either side of the equation, such as a flare-up of Middle East tensions that significantly impacts supply, oil is likely to keep trading rangebound,” he added.

The Organization of the Petroleum Exporting Countries is scheduled to release its monthly market report on Tuesday, while the International Energy Agency will issue its corresponding outlook on Thursday.

The US Energy Information Administration will also post its Short-Term Energy Outlook this week.

Iran’s oil exports, meanwhile, have reached their highest level since 2018, when former US President Donald Trump abandoned Tehran’s nuclear deal with world powers and reimposed sanctions, the country’s oil minister said.

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