Oil futures moved higher Monday, but remain rangebound as investors weigh geopolitical tensions and the outlook for demand.
Price moves
-
West Texas Intermediate crude for February delivery
CL.1,
+0.25% CLG24,
+0.25%
rose 25 cents, or 0.3%, to $73.66 a barrel on the New York Mercantile Exchange. March WTI
CL00,
+0.33% CLH24,
+0.33% ,
the most actively traded contract, was up 21 cents, or 0.3%, at $73.46 a barrel. -
March Brent crude
BRN00,
+0.32% BRNH24,
+0.32% ,
the global benchmark, rose 13 cents, or 0.2%, to 78.69 a barrel on ICE Futures Europe.
Market drivers
WTI rose 1% last week, based on the front-month contract, while Brent eked out a 0.3% rise.
The gains last week for oil were driven largely by cold weather in North Dakota and other parts of the northern U.S. that resulted in production outages, analysts at Sevens Report Research wrote in a Monday note.
Crude has occasionally popped higher around developments in the Middle East, but has failed to build in a geopolitical risk premium, with WTI trading around $20 a barrel below its 2023 high set in late September.
See: Oil traders aren’t panicking over Middle East shipping attacks. Here’s why.
The “fear bid” around the Israel-Hamas war has continued to weaken “due to the simple fact that, despite several ships being attacked in the Red Sea in recent weeks, the regional tensions and fighting have not had a meaningful impact on global oil supply up to this point, which was the initial concern,” they wrote.
They see oil fundamentals remaining tilted slightly in favor of the bears because OPEC+ looks unlikely to cut production further than they already have, while worries about demand are stoked by a lack of indication that global central banks will move quickly to cut interest rates.
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