Oil trading was sluggish, pushing the 30-day volatility level to the lowest in a year, with traders stuck between higher energy demand in China and signs of an oversupplied market in the US.
A bumper build in US oil inventories and key gauges pointing to oversupply, overshadowed the rebound in Chinese airline travel and energy consumption, halting a mid-day run by bulls. West Texas Intermediate ultimately settled lower for a third-straight session.
“The commodity is stuck in neutral as it tries to see which one of the market drivers will be most impactful over the next couple of months,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth.
Halfway through February, crude is on track for it narrowest monthly range since June 2021, trading in a band of about $8. Fluctuations have been limited amid various outlook scenarios arising from factors including: more robust demand from China, a Russian pledge to cut production and a slowdown in countries trying temper inflation with higher interest rates.
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