Crude Down As Excess Supply & Demand Uncertainties Drive Market

Oil prices have given up some of Friday’s gains during the APAC session today as China returned from holidays. Brent is down 0.7% to $82.87/bbl and has struggled to trade above $83 with equity sentiment mixed and demand again overtaking geopolitical concerns. WTI is 0.8% lower at $77.87 falling below $78 when China/HK markets opened. Trading is likely to be thin with the US closed for a holiday. The USD index is down slightly.

• The IEA wrote in its monthly report published last week that it expects demand will ease through 2024 and that the market will be in surplus throughout the year. China’s demand outlook remains a significant point of uncertainty.
• Geopolitical issues persist with no progress being made in resolving the conflict in the Middle East but they are yet to impact energy supplies apart from delays from rerouting around southern Africa. UKMTO reported today another vessel had been struck by Houthi rebels off the coast of Yemen with the crew abandoning the ship. The US said that it has struck five Houthi targets.
• The US and Canada are closed for holidays. There are no ECB or BoE speakers either. Attention this week is likely to be on geopolitical developments, US inventory data, the FOMC minutes and preliminary February PMIs.