Oil steadied at the week’s open as traders assessed challenges to supply in the wake of the unexpected output cut by OPEC+.
West Texas Intermediate was little changed below $81 a barrel after rallying almost 7% last week following the move by the Organization of Petroleum Exporting Countries and its allies. Turkey wants to negotiate with Iraq a settlement it’s been ordered to pay before a pipeline that exports 400,000 barrels a day is reopened, according to Turkish officials familiar with the situation.
Russia’s Energy Ministry, meanwhile, said that the nation reduced its oil output by about 700,000 barrels a day last month, according to a person familiar with the data. Nevertheless, that figure is inconsistent with indicators on the nation’s March seaborne exports and supplies to domestic refineries.
Crude is coming off the back of three weekly gains, the longest such run this year. While OPEC+’s surprise decision has reignited bullish bets on prices, some demand indicators are showing signs of weakness as slowdown concerns persist. Traders will get valuable insights this week as OPEC and the International Energy Agency are due to release monthly outlooks, while US inflation data and Federal Reserve minutes are also set to be issued.
“Economic data will form a key input this week for energy markets,” said Charu Chanana, market strategist for Saxo Capital Markets Pte. “Given that the OPEC decision was partly intended to drive out short sellers from the crude oil market, oil prices may be better able to reflect market fundamentals.”