Oil prices already may have hit a floor for 2023, RBC analysts say

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Energy (NYSEARCA:XLE) was Monday's poorest performer among the S&P 11 stock market sectors, -2.3%, as oil prices faded ahead of the OPEC+ meeting later this week, with traders appearing reluctant to press positions ahead of the Wednesday meeting of the Joint Ministerial Monitoring Committee, which reviews the oil market.

Front-month Nymex crude (CL1:COM) for March delivery settled -2.2% to $77.90/bbl, and March Brent crude (CO1:COM) closed -2% at $84.90/bbl, extending declines from last week.

Meanwhile, U.S. natural gas (NG1:COM) finished -6% to $2.677/MMBtu, its lowest settlement since mid-April 2021.

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The day's biggest losers on the S&P 500 included Constellation Energy (CEG) -4.8%, Devon Energy (DVN) -4.5%, Marathon Oil (MRO) -4.3%, and Diamondback Energy (FANG) -3.7%.

Oil prices may have already found a floor for the year, Royal Bank of Canada analysts Helima Croft and Michael Tran said, anticipating commodity prices will enjoy a boost from China's economic re-opening.

"China's re-opening is unequivocally bullish for commodities" and so far is "far from priced into the oil market," the RBC analysts said, expecting WTI prices will average ~$92/bbl for the year.

Russia's invasion of Ukraine will cut demand for oil and natural gas and accelerate the transition to cleaner energy as a way to increase security of supply while also cutting carbon emissions, BP said Monday in its annual energy outlook.