Oil steady with demand in focus after worst week since October

As crude plunged last week, the total number of futures contracts held by traders plunged about 7% -- a sign that many in the market fled for the exit. Others are confident about the long-term outlook and a return to higher prices.

Oil was steady as investors assessed the near-term demand outlook after prices fell the most since October last week.

Brent futures rose 0.2% on Monday after falling 6.8% last week. Demand is showing some signs of weakness with the number of unsold April-loading oil cargoes from West Africa piling up. (Reuters file photo. Representative image)

Brent futures rose 0.2% on Monday after falling 6.8% last week. Demand is showing some signs of weakness with the number of unsold April-loading oil cargoes from West Africa piling up. In Europe, new virus restrictions are expanding in France and Italy, while Germany is proposing an extension to lockdown measures.

However, there’s continued optimism over consumption in the U.S. as the Biden administration unleashes a wave of stimulus. The number of passengers checking through airport security in the country has been above 1 million people every day since March 10. That could provide support for jet fuel, the worst-hit oil product during the coronavirus crisis.

As crude plunged last week, the total number of futures contracts held by traders plunged about 7% -- a sign that many in the market fled for the exit. Others are confident about the long-term outlook and a return to higher prices. Goldman Sachs Group Inc. said the recent sell-off was transient and that the market rebalancing would continue with vaccinations driving higher mobility.

“Market players have been guilty of living in the future,” said Stephen Brennock an analyst at brokerage PVM Oil Associates Ltd. “Those of a bullish disposition have been looking ahead at a summer rebound in oil demand. Yet currently there has been no concrete sign of a meaningful jump.”

Iran’s Supreme Leader Ayatollah Ali Khamenei, meanwhile, said his country was in no hurry to revive the nuclear deal, although he reiterated that Tehran was still prepared to return to the original terms of the agreement once the U.S. has lifted sanctions.