LDN - Business

Oil prices steady as Middle East war counters China demand concerns

[March 11, 2024] By Natalie Grover

LONDON (Reuters) -Global benchmark Brent held steady, hovering around $82 a barrel on Monday, as persistent geopolitical concerns in the Middle East and Russia collide with jitters about softening demand in China.

Brent futures were up 26 cents at $82.34 a barrel as at 1015 GMT, while U.S. West Texas Intermediate (WTI) rose 23 cents to $78.24.

Both benchmarks ended the week lower on bearish Chinese data that signaled weaker demand in the world's leading crude importer.

Brent closed down 1.8%, although the contract has remained above $80 a barrel for just over a month. Meanwhile, WTI ended 2.5% lower.

"The oil complex is in a wait-and-watch mode over the Gaza war and its cascading conflicts, with a question-mark over Israel's military plans, now that the Muslim holy month of Ramadan is starting without a ceasefire and hostage deal," said Vandana Hari of Vanda Insights.

Hopes for a ceasefire appeared to have stalled. No dates have been set for further meetings with mediators in Cairo, a Hamas official told Reuters.

Over the weekend dozens of drones were downed by U.S., French and British forces in the Red Sea area, after Yemen's Iran-aligned Houthis targeted bulk carrier Propel Fortune and U.S. destroyers in the region, the U.S. military said.

The 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.

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An oil pumpjack is pictured in the Permian basin, Loco Hills regions, New Mexico, U.S., April 6, 2023. REUTERS/Liz Hampton/File Photo

DATA SIGNALS

China's imports of crude oil rose in the first two months of the year compared with the same period in 2023, but they were weaker than the preceding months, data showed on Thursday, continuing a trend of softening purchases by the world's biggest buyer.

Meanwhile, mixed signs from U.S. data last week prompted some traders to adjust positions.

U.S. 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.

On the supply side, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, agreed early this month to extend voluntary oil output cuts of 2.2 million barrels per day into the second quarter.

"With OPEC+ extending its voluntary production cut agreement until the end of second quarter, this could tighten the market as demand recovers from its seasonal lull," ANZ Research analysts said.

(Reporting by Natalie Grover in London, Yuka Obayashi in Tokyo and Mohi Narayan in New Delhi; Editing by Lincoln Feast and Ros Russell)

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