Brent futures steadied below $112 per barrel this morning as investors awaited Chinese trade data, US corporate earnings and the outcome of a European Central Bank policy meeting to glean insights into the health of the world's biggest economies.
China, the world's biggest energy consumer, will release its December trade figures on Thursday and fourth-quarter economic growth numbers on January 18, while the ECB and Bank of England will begin their policy meetings later in the day.
Investor caution preceding the events also kept a lid on Asian stock gains. For the oil markets, inventory data showing a jump in US crude stockpiles added to the pressure.
Front-month Brent futures shed 3 cents to $111.91 per barrel at 06.21 GMT, after adding 54 cents yesterday. US crude was trading down 11 cents at $93.04 per barrel.
"What we're seeing in the oil markets is the cautious sentiment playing up ahead of some key economic events this week," said Ker Chung Yang, senior investment analyst at Phillips Futures in Singapore.
"Trading at the start of the year is typically steady and I expect prices to remain range bound in the first quarter." US crude futures slid while Brent rose in the previous session when the annual rebalancing of the S&P GSCI commodity index kicked in, prompting index funds to adjust their portfolios accordingly.
The rebalancing, announced in early November, will increase the index's holdings of Brent and reduce holdings of WTI as the output of Brent-related grades wanes and US crude output surges. The passive index rolls its holdings between the fifth and ninth trading days of the month.
Reuters
