Oil steady as market awaits Chinese GDP data

The release of China’s first-quarter gross domestic product (GDP) data this week is expected to be positive for commodity prices, with the International Energy Agency (IEA) forecasting it will account for most of 2023 demand growth.

The data are due to be published at 0200 GMT on Tuesday.

However, the IEA warned in its monthly report that the output cuts announced by OPEC+ producers risked exacerbating an oil supply deficit expected in the second half of the year and could hurt consumers and a global economic recovery.

"Crude futures were relatively rangebound as a fresh week began … with the OPEC/non-OPEC output cuts announced a fortnight ago fully baked in", Andana Hari, founder of oil market analysis provider Vanda Insights, said.

"Crude prices have defaulted to tracking the daily mood in the broader financial markets" as fears over possible recession continue to cloud the horizon, she added.

Further tightening supplies, oil exports from northern Iraq to the Turkish port of Ceyhan remain at a standstill almost three weeks after an arbitration case ruled Ankara owed Baghdad compensation for unauthorised exports.

Rising costs for Middle Eastern crude supplies, which meet more than half of Asia’s demand, are already squeezing refiners’ margins, prompting them to secure supplies from other regions.

Refiners are also ramping up gasoline output ahead of peak summer demand, while cutting diesel production amid worsening margins.

Meanwhile, earnings from U.S. companies could also provide clues for the Federal Reserve’s policy path and the dollar’s trajectory.

The greenback has been strengthening alongside interest rate hikes, making dollar-denominated oil more expensive for holders of other currencies.

Traders are betting the Fed will raise its lending rate in May by another quarter of a percentage point and have pushed out to late this year expectations of a rate cut, as typically occurs in a slowdown.