Oil Swings Near Lowest Since October With Surplus in Focus
ManuelSummary:
Diesel futures, which were down about 0.7%, lagged the oil complex on Friday, while a selloff in US stocks dragged global gauges from the brink of record highs.
Oil prices fluctuated, hovering above the lowest levels in about two months as weakness in US equities markets added to bearish sentiment about oversupply.
West Texas Intermediate traded above $57 a barrel, while Brent traded above $61 a barrel in thin trading. Diesel futures, which were down about 0.7%, lagged the oil complex on Friday, while a selloff in US stocks dragged global gauges from the brink of record highs.
Concerns about oversupply have helped to push crude toward the lower end of a band it has traded in since mid-October, with Brent futures slowly trending toward $60 a barrel. Prices have not dipped below the key psychological level since May.
The International Energy Agency on Thursday reiterated its prediction for an unprecedented surplus — although slightly below its forecast last month — and said global inventories have swollen to a four-year high.
Geopolitical tensions may add some support to oil prices. President Donald Trump announced new sanctions on three of Venezuelan counterpart Nicolas Maduro’s nephews as well as six oil tankers, after the US seized a supertanker off the coast of the Latin American nation on Wednesday.
The ship seizure was just the beginning of a new phase in the Trump administration’s ramped-up pressure campaign against the Venezuelan president, according to people familiar with the operation. The act of economic statecraft is designed to deny Maduro a lifeline of oil revenue and force him to relinquish power, the people said.
And a murky outlook for a peace deal to end Russia’s war in Ukraine — which could lower prices by eliminating sanctions on Russian crude — is also helping to support oil.
“Ukraine also seems to keep targeting Russian oil assets even as negotiations for peace are in the works which seems to be keeping a psychological floor in crude,” said Dennis Kissler, senior vice president for trading at BOK Financial Securities Inc.
Source: Bloomberg
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