Oil swings as traders weigh Fed commentary against China outlook

Oil fluctuated between gains and losses as traders took stock of U.S. monetary policy comments from Federal Reserve officials and the outlook for Chinese demand.

West Texas Intermediate pared losses and was nearly unchanged near US$74 after earlier losing as much 1.1 per cent. The day started on a sour note after two Fed officials said the bank will likely need to raise interest rates above 5 per cent to combat inflation, but losses were trimmed  after Fed chief Jerome Powell refrained from giving any further clues. 

“Technically, the energy complex remains stuck in neutral, with a wide range for prices to swing inside of without creating a new trend,” analysts at wholesale-fuel distributor TACenergy wrote in a note to clients. “Fundamentally, the case for prices bottoming is getting stronger as lingering supply issues coincide with demand picking up both domestically and abroad.”