Oil gained as energy traders grew more confident about the commodity’s immediate outlook.
Global benchmark Brent flipped from contango into a backwardated structure with the March contract surpassing April’s. The flip to oil being more expensive in the near-term signals that traders see demand outpacing supply. The spread was in contango for most of January.
US benchmark West Texas Intermediate fluctuated in a range of just over $2 in tandem with broader market swings as investors sifted through a batch of freshly released US economy figures. The US economy expanded by more than forecast in the fourth quarter but at a slower clip than the previous three months, suggesting the Federal Reserve’s attempts to restrain growth without choking it off was working.
Oil has recovered from a steep drop at the start of the year, led by demand from China — the world’s largest crude importer. Traders are starting to see a pick up in energy demand, with Chinese tourism likely having a major impact on consumption.
- WTI for March delivery rose 86 cents to settle at $81.01 a barrel in New York.
- Brent for March settlement increased $1.35 to settle at $87.47 a barrel.