Oil retreated as the dollar climbed and exports resumed from a key Turkish port.West Texas Intermediate futures dropped below $79 a barrel, after gaining more than 2% on Friday following Russia’s decision to cut oil supply by half a million barrels a day. Tanker loadings of Azeri oil at the Turkish port of Ceyhan resumed on Sunday, ending a major supply disruption.
Investors remain wary the Federal Reserve will keep pushing interest rates higher to tame inflation, aiding the dollar. A stronger US currency is a headwind for most commodities.
Oil has had a choppy start to 2023, bouncing within a $10 band, as Russia’s almost year-long war in Ukraine continues to impact the energy market, while China’s reopening after restrictive Covid curbs boosts the outlook for demand. In addition, there has been a host of supply disruptions in Europe, adding to the concerns about the outlook for even tighter US monetary policy
“We are seeing some profit-taking after the scale of the move last week,” said Warren Patterson, head of commodities strategy at ING Groep NV. “In the short term, I suspect prices are going to remain fairly range-bound due to the first-quarter surplus.”
Prices:
WTI for March delivery lost 1.4% to $78.63 a barrel at 10:31 a.m. in London
Prices rallied 8.6% last week
Brent for April shed 1.3% to $85.25
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