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Oil futures drifted lower early Thursday, with the U.S. benchmark edging down from a nearly five-month high as investors assessed the economic outlook and prospects for crude demand.
A monthly assessment of the outlook for supply and demand from the Organization of the Petroleum Exporting Countries drew little reaction.
Price action
-
West Texas Intermediate crude for May delivery
CL.1,
-0.76% CLK23,
-0.76%
fell 20 cents, or 0.2%, to $83.06 a barrel on the New York Mercantile Exchange. The U.S. benchmark ended Wednesday at its highest since Nov. 16. -
June Brent crude
BRN00,
-0.84% BRNM23,
-0.84% ,
the global benchmark, was off 33 cents, or 0.4%, at $87 a barrel on ICE Futures Europe. -
Back on Nymex, May gasoline
RBK23,
-1.25%
fell 1.4% to $2.8337 a gallon, while May heating oil
HOK23,
-0.87%
traded at $2.6931 a gallon, down 0.4%. -
May natural gas
NGK23,
-3.20%
lost 3.3% to $2.025 per million British thermal units.
Market drivers
Crude prices were consolidating after seeing gains the previous session in the wake of a U.S. consumer-price index reading that showed inflation cooled somewhat in March, easing fears around the scope of future Federal Reserve interest-rate increases.
On Wednesday, data revealed that U.S. wholesale prices declined by 0.5% in March — the biggest fall in almost three years.
Meanwhile, U.S. Energy Secretary Jennifer Granholm reportedly said on Wednesday that the Biden administration plans to refill the nation’s Strategic Petroleum Reserve soon, which provided some support for oil prices.
Crude futures saw little reaction early Thursday to a monthly report from OPEC, which left its forecast for growth in world oil demand this year unchanged at 2.3 million barrels a day (mb/d), for an average of 101.9 mb/d.
The cartel warned the outlook “is subject to many uncertainties, including the trend and pace of economic activity in both OECD and non-OECD countries.” The Organization for Economic Cooperation and Development is made up of wealthy countries.
Also see: Global oil production growth will soon ‘shift’ away from OPEC, says EIA
“On the charts, WTI broke out to the upside,” closing at a new year-to-date high Wednesday, which “shifts the technical outlook from a less-convicted bearish or neutral stance, to a bullish one,” said analysts at Sevens Report Research in a Thursday note.
“The measured move out of the April trading range is $84.62, which futures are fast approaching this week. The risk of a sharp retracement back to the pre-April levels between $75 and $76/barrel remains elevated due to the sizable gap on the daily, weekly, and monthly charts,” they wrote.
On Nymex, natural-gas futures continued to trade lower after the Energy Information Administration reported on Thursday that domestic natural-gas supplies rose by 25 billion cubic feet for the week ending March 31.
Market expectations called for a storage increase of around 20 billion cubic feet, said Victoria Dircksen, commodity analyst at Schneider Electric.
The data revealed the first weekly natural-gas supply increase of the year so far, according to data from the EIA.
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