Brent on track for first five-day losing streak since 2023
04 June 2024 - 07:40
UPDATED 04 June 2024 - 17:20
byArathy Somasekhar and Trixie Yap
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Aerial view of the Gullfaks C oil platform, North Sea, August 23, 2023. Picture: REUTERS/Nora Buli/File Photo
London — Oil prices fell more than $1 on Tuesday on scepticism about an Opec+ decision to boost supply later this year into a global market where demand has already shown signs of weakness.
Extending losses from a four-month low in the previous session, Brent crude futures fell $1.13, or 1.4%, to $77.23 a barrel on Tuesday. Brent on Monday closed below $80 for the first time since February 7, after falling more than 3%.
At its lowest on Tuesday, Brent traded at $76.76, less than $2 shy of this year’s nadir of $74.79 at the beginning of January.
US West Texas Intermediate (WTI) crude futures eased $1.21, or 1.6%, to $73.01 a barrel. WTI on Monday fell by 3.6% to settle near a four-month low.
Oil cartel Opec+ on Sunday agreed to extend most of its oil output cuts into 2025 but left room for voluntary cuts from eight members to be gradually unwound beginning in October.
“The market reaction is depressing to anyone who produces oil and brings elevated joy for consumers,” said Tamas Varga of oil broker PVM.
The planned October unwinding adds jitters about oversupply into an environment where traders are already spooked about high interest rates hampering global economic activity, as a steady flow of dim signals from major economies like the US, China and Europe suggests their appetite for oil may not be as healthy as hoped through the rest of the year.
On top of this, supply is also rising from non-Opec producers such as the US.
“With the ‘bad news is bad news’ mantra in place, further evidence of economic weakness may lead oil prices lower, potentially paving the way for a retest of the lower end of its month-long range at the $72 level,” IG market strategist Yeap Jun Rong said.
The US government will release inventory and product supplied data on Wednesday. Product supplied, considered a proxy for demand, will show how much petrol was consumed around the Memorial Day weekend, the start to the US driving season.
“How demand for oil will develop in the coming quarters is likely to be crucial,” said Carsten Fritsch, an analyst at Commerzbank.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil prices drop more than $1 on shaky demand
Brent on track for first five-day losing streak since 2023
London — Oil prices fell more than $1 on Tuesday on scepticism about an Opec+ decision to boost supply later this year into a global market where demand has already shown signs of weakness.
Extending losses from a four-month low in the previous session, Brent crude futures fell $1.13, or 1.4%, to $77.23 a barrel on Tuesday. Brent on Monday closed below $80 for the first time since February 7, after falling more than 3%.
At its lowest on Tuesday, Brent traded at $76.76, less than $2 shy of this year’s nadir of $74.79 at the beginning of January.
US West Texas Intermediate (WTI) crude futures eased $1.21, or 1.6%, to $73.01 a barrel. WTI on Monday fell by 3.6% to settle near a four-month low.
Oil cartel Opec+ on Sunday agreed to extend most of its oil output cuts into 2025 but left room for voluntary cuts from eight members to be gradually unwound beginning in October.
“The market reaction is depressing to anyone who produces oil and brings elevated joy for consumers,” said Tamas Varga of oil broker PVM.
The planned October unwinding adds jitters about oversupply into an environment where traders are already spooked about high interest rates hampering global economic activity, as a steady flow of dim signals from major economies like the US, China and Europe suggests their appetite for oil may not be as healthy as hoped through the rest of the year.
On top of this, supply is also rising from non-Opec producers such as the US.
“With the ‘bad news is bad news’ mantra in place, further evidence of economic weakness may lead oil prices lower, potentially paving the way for a retest of the lower end of its month-long range at the $72 level,” IG market strategist Yeap Jun Rong said.
The US government will release inventory and product supplied data on Wednesday. Product supplied, considered a proxy for demand, will show how much petrol was consumed around the Memorial Day weekend, the start to the US driving season.
“How demand for oil will develop in the coming quarters is likely to be crucial,” said Carsten Fritsch, an analyst at Commerzbank.
Reuters
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