Oil Falls as Technicals Stall Rally

by Bloomberg | Jordan Fitzgerald and Alex Longley
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas

Oil edged lower, backing off a two-month high, as technical indicators restrained a rally driven by tensions in the Middle East and the Atlantic hurricane season.

West Texas Intermediate climbed as much as 1.2% to top $84 a barrel and reach its highest intraday price since April 26 before retreating to settle below $83. Prices skirted in and out of overbought territory during the session after advancing more than 2% on Monday.

Prices rose earlier after Israel’s military said 18 soldiers were injured, one of them seriously, in a drone attack by Iran-backed Hezbollah, threatening to widen the conflict. Israel also is continuing its siege on Gaza, ordering Palestinians to leave the city of Khan Younis ahead of a potential attack.

In the Americas, Hurricane Beryl has strengthened to Category 5 — the highest level on the Saffir-Simpson scale — becoming the strongest storm to ever form in the Atlantic at this time of the year. While there’s only a 30% to 40% chance that a weakened Beryl will hit the upper Gulf of Mexico, where US offshore operations are located, the record-setting storm may be a harbinger of a supply-roiling season to come.

“We are up on geopolitical and hurricane risk, both of which are typical short-lived rallies,” said Rebecca Babin, senior energy trader at CIBC Priv

Oil rose last month as OPEC+ vowed to keep supply in check and travel picked up in the northern hemisphere summer, with traders likely to keep a close eye on gasoline demand around Thursday’s US Independence Day holiday. OPEC+, however, was reported to have increased production in June, and concerns over a struggling recovery in China — the world’s biggest crude importer — both of which may be restraining gains.

Macroeconomic forces may also be paring prices. US Federal Reserve Chair Jerome Powell indicated that officials need more evidence before cutting interest rates even though a key indicator showed inflation cooling.

Prices:

• WTI for August delivery fell 0.7% to $82.81 a barrel in New York.
• Brent for September settlement dropped 0.4% to $86.24 a barrel.

by Bloomberg | Jordan Fitzgerald and Alex Longley
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas