Oil futures moved slightly higher early Thursday, attempting to snap a three-day losing streak that’s sent the global benchmark to its low of the year amid worries over the economic outlook.
Price action
-
West Texas Intermediate crude for June delivery
CL.1,
+0.16% CLM23,
+0.16%
rose 13 cents, or 0.2%, to $68.73 a barrel on the New York Mercantile Exchange, after ending Wednesday at its lowest since March 20. -
July Brent
BRN00,
+0.46% BRNN23,
+0.46% ,
the global benchmark, was up 31 cents, or 0.4%, at $72.64 a barrel on ICE Futures Europe. It finished Wednesday at its lowest since Dec. 20, 2021. -
Back on Nymex, June gasoline
RBM23,
+0.27%
was flat at $2.322 a gallon, while June heating oil
HOM23,
+0.34%
edged up 0.1% at $2.234 a gallon. -
June natural gas
NGM23,
+0.14%
fell 0.4% to $2.161 per million British thermal units.
Market drivers
Crude has suffered a rout that’s taken the U.S. benchmark down nearly 11% so far this week and Brent off 9.6%, after more than erasing early April gains scored after the Organization of the Petroleum Exporting Countries and its allies — known as OPEC+ — announced surprise production cuts that kicked in at the start of May.
“Oil is trading off of fears of a collapse in consumer demand given the uncertainties surrounding the banking sector and worries that a deep and painful recession could be looming,” wrote analysts at Sevens Report Research.
Doubts about Russia’s commitment to a 500,000 barrel-a-day production cut that it pledged to continue through year-end have also undercut crude prices, analysts said. Russia’s deputy prime minister, Alexander Novak, on Thursday said the country was abiding by the cut, news reports said.
Crude’s slide has WTI approaching technically oversold territory and important chart support between $66 and $68 a barrel, “which will likely see the selling pressure ease and the market consolidate some of the recent weakness,” wrote the analysts at Sevens Report Research. “That is unless risk-off money flows pick up meaningfully in the session ahead and then oil will remain under pressure with a good possibility of reaching new [year-to-date] lows.”
