U.S. gears up for Presidents' Day while oil trades thin.
On Monday morning, oil prices decreased slightly as markets considered the comments of U.S. Federal Reserve officials regarding a more cautious approach to potential interest rate cuts, in light of thin early trading on a public holiday in the United States.
At 0138 GMT, $82.89 a barrel was down 58 cents, or 0.69%, while $78.84 was 35 cents, or 0.44%, lower.
The direction of demand from China after the Lunar New Year holiday is yet to be seen by markets, while Presidents' Day in the United States is expected to keep trade relatively subdued.
Despite a week of dismal U.S. economic data, including rising prices and declining retail sales and factory production, Federal Reserve policymakers on Friday indicated a "wait-and-see" approach to interest rate cuts. This approach may lead to higher rates, which could negatively impact the cost of buying oil and contribute to a bearish market trend.
The Gaza Strip's second-largest hospital was put out of service due to Israeli raids over the weekend, while Yemen's Iran-aligned Houthi fighters claimed responsibility for an attack on an India-bound oil tanker.
OPEC's spare capacity is at an eight-year high of 6.4 million barrels of oil per day, which allows it to cover "most levels of disruption," according to ANZ Research analysts in a client note.
The International Energy Agency warned that growth in demand is expected to slow down in 2024, which was also noted by ANZ. The agency forecasts a market surplus during the year.
On Tuesday, the United Nations Security Council is expected to vote on an Algerian proposal to call for an immediate humanitarian ceasefire in the Israel-Hamas conflict. However, diplomats said that the United States has indicated it will veto the motion.
On Sunday, Russia announced that it had gained full control of the Ukrainian town of Avdiivka, marking its biggest advancement in nine months, just days before the two-year anniversary of its invasion.
The death of Alexei Navalny, a prominent opponent of President Vladimir Putin, in a Russian penal colony on Friday, may result in new sanctions on Moscow, the world's second-largest oil exporter.
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