Oil steady post 5 sessions of gains, as market juggles supply, demand fears

By Rowena Edwards

LONDON (Reuters) -Oil prices were little changed on Tuesday after five sessions of gains, with weak oil data from top crude importer China balanced by concern over supply.

Brent crude futures fell 22 cents, or 0.26%, to $85.96 a barrel by 1043 GMT. U.S. West Texas Intermediate crude was down 16 cents, or 0.2%, at $80.30.

Bearish sentiment surrounded a contraction in China's exports and imports in January and February, including crude imports. The decline came despite a lifting of COVID-19 restrictions, pointing to weakness in foreign demand.

"Given the high inflation in the U.S. and Europe, demand from there should keep weakening, which also dampens processing demand in China," said Iris Pang, ING's chief economist for Greater China.

 

Price support, meanwhile, was provided by supply concerns. Chevron Chief Executive Mike Wirth on Monday told at a Houston conference that there is "not a lot of swing capacity", making the global market vulnerable to any unexpected supply disruption.

"The key unknown for 2023 will be the disruption to Russia's oil and refined product exports," Commonwealth Bank of Australia analyst Vivek Dhar said in a note.

U.S. crude inventories could register their first decrease in 10 weeks, a Reuters poll showed before official data is published this week. [EIA/S]

The American Petroleum Institute's weekly report is due at 2130 GMT on Tuesday, with Energy Information Administration data following at 1530 GMT on Wednesday.

The market will also look for direction from U.S. Federal Reserve Chair Jerome Powell's testimony before the Senate Banking Committee at 1500 GMT on Tuesday.

The focus will be on whether he remains confident that the Fed is on the right path to keep inflation on a steady decline towards its 2% target.

(Reporting by Rowena EdwardsAdditional reporting by Florence Tan and Trixie Yap in SingaporeEditing by David Goodman)