Oil swung as technical support levels helped insulate crude from risk-off sentiment in broader markets. 

West Texas Intermediate slipped 0.4 per cent to less than US$79 a barrel after fluctuating in a US$2 range on the day. Equity markets dropped as traders weighed mixed economic data ahead of Federal Reserve Chair Jerome Powell’s testimony in Congress. Crude’s 200-day moving average of about $77.84 has provided resistance for its declines. 

“The anticipation of the Fed chairman holding interest rates steady into mid-year is a pressure point to crude prices,” said Dennis Kissler, senior vice president at BOK Financial. “Higher interest rates will keep the US dollar elevated, which is a headwind for crude exports.”

Crude has been on a slow-motion ascent that has seen WTI gain about 10 per cent this year, aided by strength in physical markets as global shippers avoid the Red Sea and OPEC+ works to limit supply. That optimism has been tempered by strong production from outside of the cartel, a shaky demand outlook in China and expectations central banks will start monetary easing later than previously expected.

Meanwhile, China set its annual growth target at about 5 per cent, raising expectations for officials to unleash more stimulus as they try to lift confidence in a slowing economy. The nation also set a more ambitious target for reducing the energy needed for economic expansion, or energy intensity, this year.

Prices:

• WTI for April delivery fell 0.4 per cent to $78.46 a barrel at 12:49 p.m. in New York.
• Brent for May settlement slid 0.5 per cent to $82.37 a barrel.