| At 10:25 am Singapore time (0225 GMT), the ICE February Brent futures contract was down 5 cents/b (0.07%) from the previous close at $74.37/b, while the NYMEX January light sweet crude contract fell 4 cents/b (0.06%) at $70.90/b.
Coming a month after US core inflation for October hit a 30-year high, expectations are high that this month’s report will notch similar records and further heighten the case for the US Federal Reserve to tighten monetary policy faster than planned.
A strong print is expected to send the US dollar higher, making it more expensive for holders of other currencies to purchase dollar-denominated oil. As of 0225 GMT, the US dollar index was down 0.08% at 96.19. While crude prices were still on track to end the week higher, analysts nonetheless noted weakness in the prompt time spreads for both benchmarks, potentially signaling weakening supply-demand fundamentals in the months ahead. “The prompt Brent spread is at its weakest level since February and appears to reflect expectations for a loosening in the oil balance in the coming months. Similarly, the WTI time spread has also come under pressure, trading down to its lowest levels since late 2020,” ING analysts Warren Patterson and Wenyu Yao said. (S&P Global Platts)
Prices are under pressure as China’s domestic air traffic, once the world’s envy after a fast rebound during the pandemic, is faltering amid a zero-COVID policy that has led to tighter travel rules in Beijing and weaker consumer confidence after repeated small outbreaks. Meanwhile, ratings agency Fitch downgraded property developers China Evergrande Group and Kaisa Group, saying they had defaulted on offshore bonds. That reinforced fears of a potential slowdown in China’s property sector, as well as the broader economy of the world’s biggest oil importer. (Reuters)
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