(Bloomberg) -- Oil extended last week's losses on Monday as traders awaited fresh clues about global demand and balances.
Brent fell toward $81 a barrel after shedding more than 2% last week, with US counterpart West Texas Intermediate near $76. Participants at the International Energy Week in London, a major industry gathering, are set to weigh in on the outlook for oil this week, while US inflation data will shape expectations for when the Federal Reserve will start cutting interest rates.
In wider markets, a gauge of the US currency held its ground, while most commodities including copper were weaker along with crude.
Oil has traded in a narrow band of about $3 a barrel for the past two weeks, with tensions in the Middle East and OPEC+ supply curbs offsetting the impact of higher production from outside the group, including the US. The cartel and its allies including Russia are widely expected to prolong their current cutbacks into the next quarter at their meeting early next month.
“We still expect OPEC+ to extend cuts through the second quarter of 2024, and to only gradually and partially phase out the latest package starting in the third quarter,” Goldman Sachs Group Inc. analysts including Daan Struyven said in a note. For now, the bank expects prices to remain in a $70-to-$90 range.
There are some positive signals on demand. In China, a boom in travel during the Lunar New Year holidays has raised hopes of a more sustained recovery in consumption. Local refiners have been snapping up cargoes from across the world since the mid-February holiday, according to traders, as well as having increased term supplies from Saudi Arabia for March.
Among market metrics, timespreads have been holding in a bullish backwardated pattern, while prices of physical crude in the US have also been strengthening in recent weeks as buyers turned to American grades to avoid Red Sea shipping disruption.
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