(Bloomberg) -- Oil edged lower, with technical support levels limiting its losses amid risk-off sentiment in broader markets.
West Texas Intermediate slipped 0.7% to just over $78 a barrel after fluctuating in a $2 range for the day. Equity markets dropped as traders weighed mixed economic data ahead of Federal Reserve Chair Jerome Powell's testimony in Congress. Crude's 200-day moving average of about $77.84 has provided resistance for its declines.
“The anticipation of the Fed chairman holding interest rates steady into mid-year is a pressure point to crude prices,” said Dennis Kissler, senior vice president at BOK Financial. “Higher interest rates will keep the US dollar elevated, which is a headwind for crude exports.”
WTI has gained 9.2% this year in a slow-motion ascent aided by strength in physical markets as global shippers avoid the Red Sea and OPEC+ works to limit supply. That optimism has been tempered by strong production from outside of the cartel, a shaky demand outlook in China and expectations central banks will start monetary easing later than previously expected.
Meanwhile, China set its annual growth target at about 5%, raising expectations for officials to unleash more stimulus as they try to lift confidence in a slowing economy. The nation also set a more ambitious target for reducing the energy needed for economic expansion, or energy intensity, this year.
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