NEW YORK: Oil steadied after a volatile session as investors balanced a bleak supply outlook against concerns over weaker demand in virus-hit China.
The price of West Texas Intermediate (WTI) oil exceeded US$80 (RM365.95) per barrel in early Asian trading.
However, prices plunged following reports that the Organization of the Petroleum Exporting Countries and allies (OPEC+) were considering a production hike, then recovered to show little change after Saudi Arabia rejected the proposal.
Reuters reported that the flow of crude oil consumption in China remains in focus as the repeated outbreak of Covid-19 prompts officials to continue restrictions on movement.
That hurt the outlook for energy demand just weeks after investors speculated Beijing might move away from its zero-tolerance stance.
“Oil prices have weakened this month amid concerns about demand, and as investors count down the clock to the imposition of new European Union (EU) sanctions on Russia.
“The move aims to increase pressure on Moscow for the war in Ukraine, while at the same time avoiding a spike in crude oil price inflation,” he said.
WTI oil for January delivery rose 0.4 percent to US$80.32 (RM367.46) a barrel on the New York Mercantile Exchange in Singapore.
Brent for January settlement closed 0.2 percent lower at US$87.45 (RM400.08) a barrel on the ICE Futures Europe exchange on Monday.
With just two weeks to go before EU sanctions come into effect, Russia has lost more than 90 percent of its market in the bloc’s northern countries.
Moscow has no plans to supply crude products or oil to countries implementing the cap.
RBC Capital Markets analyst Christopher Louney said the Saudi Arabian ministry’s strong statement denying hikes are being actively considered, and suggestions that further cuts are being considered, should give market participants pause from predicting a policy reversal. – AGENCIES
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