(Bloomberg) — West Texas Intermediate crude bounced off a monthly low to trade above $83 a barrel as war risk continues to whipsaw the market.
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With the US Congress moving to sanction Iran’s oil sector and the conflict between Israel and Iran threatening to escalate, prices may continue to see sharp swings. Last week, crude posted the biggest weekly drop since February.
Even after recent declines, oil is roughly 12% higher this year, buoyed by OPEC+ supply cuts. Investors will be focusing on a slew of US economic data this week, including the Federal Reserve’s preferred measure of inflation, which will give more clues on the path for monetary policy.
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“There’s still a bit of premium from conflict in the Middle East factored in oil prices,” according to Fawad Razaqzada, a market analyst at City Index and Forex.com. “But it is largely those OPEC+ supply cuts that’s responsible for the bulk of oil’s gains.”
Money managers are the most bullish on Brent since March 2021 as they snap up contracts to profit from any spikes. Meanwhile, oil call options — which profit when prices rise — posted a second consecutive week of record volumes.
Earnings from supermajors TotalEnergies SE, Chevron Corp. and Exxon Mobil Corp. are also due this week, as well as Reliance Industries Ltd. and Cnooc Ltd.
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