Oil little changed as Russian supply cuts support prices

Oil was little changed in early trade on Monday, as Russia’s plans to deepen oil supply cuts continued to support prices, while increasing global inflation risks and rising crude inventories in the United States weighed.

West Texas Intermediate U.S. crude futures (WTI) was trading at $76.36 a barrel, 4 cents, or 0.05% higher, while Brent crude futures was down 2 cents, or 0.02%, at $83.14 a barrel at 0114 GMT.

Russia plans to cut oil exports from its western ports by up to 25% in March versus February, exceeding its previously announced production cuts of 5% of its output during the month.

Despite oil inventories in the United States at their highest since May 2021, the U.S. Federal Reserve meeting signalling further monetary tightening and a strong rally in the dollar last week, prices edged higher early on Monday before paring some gains.

“Oil looks like it wants to stay in a trading range until we have a clearer outlook with China’s COVID reopening and on how bad of a recession the Fed will induce for the U.S. economy,” said Edward Moya, an analyst at OANDA.

Oil prices have fallen by about a sixth in the year since Feb. 24, 2022, when Russian troops first marched into Ukraine.

In its latest move, Russia has halted supplies of oil to Poland via the Druzhba pipeline, the chief executive of Polish refiner PKN Orlen said on Saturday, a day after Poland delivered its first Leopard tanks to Ukraine. Two weeks after the invasion, prices surged to a record high of nearly $128 a barrel over supply concerns, but have since cooled over fears of a global economic slowdown.

“China’s manufacturing PMI data for February will be key to steering the oil prices for this week. A rebound in Chinese economic data will boost sentiment and improve the demand outlook,” said Tina Teng, an analyst at CMC Markets.