The search for balance in oil

Oil prices fell on a weekly slide with further losses as investors awaited new clues about global demand and balances in March and beyond. Brent crude fell to $82 a barrel after losing more than 2% last week, while its U.S. counterpart, U.S. crude, was trading above $76. Outlooks will come from International Energy Week in London, a major industry gathering this week. U.S. inflation data will also shape expectations for when the Federal Reserve will start cutting rates, affecting energy demand and the dollar. In broader markets, the U.S. benchmark held firm, while most commodities including copper weakened along with crude. Oil has traded in a narrow range around $3 a barrel for the past two weeks, weighed down by tensions in the Middle East and supply curbs by OPEC+ that offset higher production from outside the group, including the United States. The cartel and its allies, including Russia, are expected to extend their current cuts into the next quarter when they meet early next month. “We expect OPEC+ to extend the cuts into the second quarter of 2024 and only gradually and partially phase out the final package from the third quarter,” Goldman Sachs Group analysts including Daan Struyven wrote in a note. For now, the bank expects prices to remain in the $70 to $90 range. There are some positive signals on demand. A travel boom in China amid the Lunar New Year holidays has raised hopes for a more sustained recovery in consumption. Local refiners have been receiving cargoes from around the world since the mid-February holiday and are also increasing March-dated supplies from Saudi Arabia, investors said.