Crude oil posted lower during the course of the session on Monday after the three-day Easter break, citing that the United States became persistent in continuing to add output, destabilizing OPEC efforts to support prices, and as the market remains wobbly over North Korea’s failed missile launch on Sunday.
Benchmark Brent crude futures declined 56 cents to settle at $55.33 at the close of trade. Meanwhile, before the major markets closed for the holiday break on Thursday, they were higher by 3 cents at $55.89 per barrel.
Subsequently, U.S. West Texas Intermediate (WTI) crude futures lost about 51 cents at $55.67 a barrel, after gaining 7 cents at $53.19 amid session on Thursday.
Looking back on last week’s trade, both benchmarks edged higher for three straight weeks, with Brent gaining 1.2 percent over the four days before the Good Friday holiday, while WTI rose 1.8 percent.
Last week’s trade remains subdued as major markets in London were still closed for the Easter holidays on Monday.
Given that the markets were anticipating for prospective geopolitical tensions over North Korea, the attempted missile launch on Sunday has failed as the projectile blew up almost immediately.
"The drop in tensions following North Korea's failed missile test ... have seen oil fade in Asia," senior market analyst Jeffrey Halley said.
"The soft U.S. CPI (consumer price index) on Friday will ease yields further, also undermining the reflationist markets such as oil and precious metals," he said.
Meanwhile, U.S. retail sales declined for two consecutive months in March and consumer prices declined for the first time within a short span of a year, based on the official data reported on Friday.
China GDP on Spotlight
Despite a better-than-expected GDP growth in China, crude prices plunged in Asian trading due to tensions on the Korean peninsula.
Elsewhere in the New York Mercantile Exchange, crude delivery for May lost about 0.86%, to settle at $52.72 a barrel. On the London’s International Exchange, Brent remained steady at 0.79% to $55.45 a barrel.
Major markets were close on Good Friday, while markets in Australia, Hong Kong and New Zealand are close for Easter Monday.
China announced its first quarter GDP on Monday, which rallied 1.3%, compared to the same period prior year for an annual pace of 6.9%, topping expectations for the year-over-year comparison.
The chart below illustrates crude oil movement in the wake of growing tensions over North Korea’s failed missile launch. Oil is currently trading at $53.43 in a light trading volume, near support 53.01.
As crude oil held lower after the holiday break, following the United States’ decision to add more output, it is expected that the price could steady at a consolidating phase.
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