Brent traded below $80 a barrel after rising nearly 4% last week, while West Texas Intermediate was close to $77. Tehran reiterated over the weekend its determination to punish Israel for the killing of Hamas’s political chief, while Iranian state media reported that a missile unit of the country’s military was conducting exercises near the Iraqi border.
Crude has followed a rally in stocks since falling to a seven-month low early last week, with a gloomy outlook in China, the largest importer, also weighing on sentiment. Traders will be watching market reports for more clarity on supply and demand (OPEC is due to publish its monthly outlook on Monday and the International Energy Agency on Tuesday), as well as U.S. inflation data on Wednesday.
Meanwhile, money managers have cut their net long positions in global benchmark Brent to the lowest level in data going back to 2011. The physical market is also flashing warning signs with US refineries running slowly as profit margins shrink.
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