Oil broke above its 100-day moving average as a shale executive in Houston projected America’s most prolific basin will soon peak, though China’s tempered economic forecast limited crude’s upside. 

The key technical level was breached for the first time in four months with lackluster supply expectations from the U.S. Oil production in the Permian Basin will peak in five to six years, Pioneer Chief Executive Office Scott Sheffield told Bloomberg TV Monday at CERAWeek by S&P Global. 

“Crude is breaking out of its recent trading range on what started out as a bearish day on the heels of China’s 5 per cent GDP target,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth.

Oil was pressured by China’s latest economic growth goal that was lower than economists projected, suggesting that a boost in the nation’s crude consumption will be smaller than the bulls had hoped for. Meanwhile, Gunvor Group’s CEO noted that so far the trading house isn’t seeing any major disruption to Russia’s flows for the upcoming month. 

Dueling hopes over China’s recovery and expectations of more interest rate hikes from the Federal Reserve have kept oil prices in a narrow range and squashed volatility this year. The commodity already has had more days with swings smaller than US$2 in 2023 than it did in all of 2022. 

Investors this week will also be watching jobs data and speeches from Fed Chair Jerome Powell this week for clues on the path for rates, with the potential for higher borrowing costs and a longer period of restrictive monetary policy posing headwinds for global fuel consumption. 

Prices and related coverage:

• WTI for April delivery rose 78 cents to settle at US$80.46 a barrel in New York.
• Brent for May settlement gained 35 cents to settle at US$86.18 a barrel.