Derek Brower, LONDON
After pushing towards $120 a barrel in February, oil markets
look fragile again. Macroeconomics, geopolitics, tepid demand
and buoyant supplies are all beginning to weigh on Brent again.
March has provided the turning point for market sentiment in
the past. Do not be surprised if it does this year, too.
In London on 4 March, Brent was trading above $110/b.
Despite the 6% drop since February’s highs,
however, those levels still look pricey and vulnerable. Bad
macroeconomic news is swirling across the world again.
As it trimmed its oil-demand growth forecast for 2013 last
month, the International Energy Agency (IEA)
nonetheless remained positive, noting improvements in the
Chinese and US economies.
Not for the first time, the agency may have spoken too soon.
Worries about both economies have resurfaced. In China, almost
all indicators gauging performance in February showed a dip in
confidence compared with January....