Oil futures hovered near unchanged early Monday, struggling for direction as investors weighed a tightening supply picture versus an uncertain demand outlook after the Federal Reserve last week signaled interest rates would remain higher for longer than market participants had anticipated.
Price action
-
West Texas Intermediate crude
CL00,
+0.02%
for November delivery
CL.1,
+0.02%CLX23,
+0.02%
was up 1 cent at $90.04 a barrel on the New York Mercantile Exchange. -
November Brent crude
BRNX23,
+0.15%,
the global benchmark, was up 8 cents, or 0.1%, at $93.35 a barrel on ICE Europe. December Brent
BRN00,
+0.05%BRNZ23,
+0.05%,
the most actively traded contract, was unchanged at $91.96 a barrel. -
October gasoline
RBV23,
+0.31%
rose 0.1% to $2.514 a gallon, while October heating oil
HOV23,
-1.00%
edged up 0.1% to $3.31 a gallon. -
October natural gas
NGV23,
+0.27%
fell 0.3% to $2.63 per million British thermal units.
Market drivers
WTI barely eked out a weekly gain Friday, after Russia moved late last week to curb exports of diesel and gasoline. Oil futures have rallied since summer, with both WTI and Brent topping the $90-a-barrel threshold after Saudi Arabia in July cut production by 1 million barrels a day, recently moving to extend the cut through year-end. Russia had also moved to extend a curb on crude exports through year-end.
Remarks by Fed Chair Jerome Powell after last week’s policy meeting, which saw rates left unchanged, dampened hopes for a quick end to tight policy even if rates have peaked, said Raffi Boyadjian, lead market analyst at XM, in a note.
September policy decisions by the Fed, European Central Bank and Bank of England have likely cleared the way for a continued pause in further rate hikes, but there’s been no relief rally for assets because “the overriding message from all three central banks has been that high rates are her to stay,” he wrote.
