Oil futures were trading near unchanged early Monday as investors assessed China’s latest efforts to bolster its lagging economy, while also monitoring the potential threat posed by Tropical Storm Idalia to Gulf Coast crude and gas output.
Price action
-
West Texas Intermediate crude for October delivery
CL00,
+0.03% CLV23,
+0.03%
was off 2 cents, or less than 0.1%, at $79.81 a barrel on the New York Mercantile Exchange. -
October Brent crude
BRNV23,
-0.15% ,
the global benchmark, was off 19 cents, or 0.2%, at $83.76 a barrel on ICE Futures Europe. November Brent
BRN00,
-0.17% BRNX23,
-0.17% ,
the most actively traded contract, was off 17 cents, or 0.2%, at $83.78 a barrel. -
Back on Nymex, September gasoline
RBU23,
-1.62%
fell 1.4% to $2.836 a gallon, while September heating oil
HOU23,
-2.05%
declined 1.6% to $3.217 a gallon. -
September natural gas
NGU23,
+4.72%
was up 2.5% to $2.603 per million British thermal units.
Market drivers
Oil futures were lifted in Asian trading hours after China’s Finance Ministry and the country’s stock market regulator introduced measures aimed at sparking buying interest in stocks, such as a halving of a tax on stock trades and limiting sales by big shareholders in companies that haven’t handed out enough dividends.
But gains subsequently faded.
Meanwhile, Tropical Storm Idalia formed Sunday in the Gulf of Mexico and was on a potential track to come ashore as a hurricane in the southern U.S., the National Hurricane Center said.
Oil rose Friday but booked back-to-back weekly declines after a string of seven straight weekly advances. Crude had seen a lift as Saudi Arabia implemented a production cut of 1 million barrels a day in July that’s due to run at least through the end of September.
“Oil trading volumes show an unusual fall since July when compared to volumes traded in the past two years. That’s partly due to weakening demand fears and falling gasoline inventories, but also due to tightening oil markets as a result of lower OPEC supply,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note.
“We know that the demand will advance toward fresh records despite weak Chinese demand. We also know that OPEC will keep supply limited to push prices higher,” she wrote. “Consequently, we are in a structurally positive price setting, although any excessive rally in oil prices would further fuel inflation expectations, rate hike expectations and keep the topside limited in the medium run.”