Oil steady on Wednesday

Oil prices steadied on Wednesday after a 2 per cent drop on Tuesday, with Brent below $80 per barrel and West Texas Intermediate (WTI) under $76. The American Petroleum Institute reported a 3.4 million-barrel decline in US crude inventories last week, potentially marking the eighth drop in nine weeks.

Recent price fluctuations stem from a rally to near the 200-day moving average and Middle East political risks. However, bearish sentiment persists, prompting Goldman Sachs and Morgan Stanley to lower their 2025 price forecasts. Challenges in China and reduced diesel demand in Europe also weigh on the market.

Traders await US economic data later this week, which could influence monetary policy. Federal Reserve Chair Jerome Powell has hinted at potential interest rate cuts. Yeap Jun Rong of IG Asia Pte notes that while geopolitical tensions and Libyan oil field closures may support prices temporarily, broader risk-taking remains cautious ahead of key US data and earnings.

Attribution: Bloomberg