[ad_1]
Oil futures climbed on Tuesday, with U.S. prices recouping losses from a day earlier and regaining their grip on the $80 mark.
OPEC+ output cuts announced a week ago tightened the supply picture, but concerns about a slowing global economy have dulled the outlook for energy demand.
Price action
-
West Texas Intermediate crude for May delivery
CL.1,
+2.02% CL00,
+2.02%
rose $1.04, or 1.3%, to $80.78 a barrel on the New York Mercantile Exchange. Prices on Monday lost 1.2% to settle at $79.74. -
June Brent crude
BRN00,
+1.45% BRNM23,
+1.45% ,
the global benchmark, climbed 76 cents, or 0.9%, to at $84.94 a barrel on ICE Futures Europe. -
Back on Nymex, May gasoline
RBK23,
+1.73%
added 1.5% to $2.8509 a gallon, while May heating oil
HOK23,
-0.32%
fell 1% to $2.6555 a gallon. -
May natural gas
NGK23,
+1.75%
shed 1.1% to $2.149 per million British thermal units.
Market drivers
The focus has been “on the supply side of the economic equation” for oil prices since the production cut announced last week by OPEC+, the Organization of the Petroleum Exporting Countries and their allies,” analysts at Sevens Report Research wrote in Tuesday’s newsletter. Worsening demand expectations have also weighed on prices, they said.
Members of OPEC+ helped boost oil prices sharply last week when they announced plans to cut production by 1.16 million barrels per day beginning in May through the end of 2023. The cut followed another major cut announced last October.
However, some market analysts believe traders are interpreting the cuts as a sign that oil producers see a slowdown in global economic growth ahead, which is why the initial bump in prices has started to fade, said Stephen Innes, managing partner at SPI Asset Management, in emailed commentary.
The unexpected OPEC+ output cut helped to improve the technical outlook for oil futures, said the analysts at Sevens Report Research.
However, U.S. benchmark WTI oil failed to hit new year-to-date highs last week and a “retracement back towards the pre-OPEC spike levels near $75[ [a] barrel should not come as a surprise, especially if there is any sort of meaningfully bearish news or a broader risk-off catalyst for markets,” they said.
Traders also accessed the outlook for energy demand after the International Monetary Fund said Tuesday that U.S. and global economies are likely to struggle to grow over the next few years as countries fight to reduce high inflation and cope with rising interest rates.
[ad_2]
Source link
