Oil Rebounds on Softer Inflation and Tightening Market Outlook
by Bloomberg | Mia Gindis and Jacob Wendler
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil extended gains as a stream of bullish data out of the US pointed to resilient domestic demand, even as trade strife continued to weigh on sentiment.
West Texas Intermediate rose 2.2% to settle near $68 a barrel, continuing a rebound from oversold territory, while Brent settled just below $71. US consumer prices rose at the slowest pace in four months in February, offering a reprieve after months of stalling inflation progress.
At the same time, US government figures Wednesday showed gasoline demand is up to 9.2 million barrels a day, the highest level since November. The nation’s oil inventories gained by 1.5 million barrels, a smaller buildup than the 4.2-million-barrel increase projected by an industry group, while reserves fell at the Cushing hub.
Still, futures remain far below their mid-January highs on the chaotic rollout of US tariffs, OPEC+ plans to add supply and a weakening demand outlook in China. Limiting gains on Wednesday were reports that the cartel’s crude production surged last month as Kazakhstan further breached its output quota, though the nation agreed on Wednesday to adhere to the limit in the near future.
“Crude is rallying amid a risk-on sentiment following a softer CPI print, as it continues to trade within the vortex of macro-driven moves,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. “The latest OPEC report highlights overproduction by several members, but the market remains firmly focused on broader macroeconomic dynamics.”
Geopolitical concerns also remain front and center. Ukraine has accepted a US proposal for a 30-day truce with Russia that raises the possibility of a pause of hostilities in the three-year-old war. Meanwhile, Iran Supreme Leader Ayatollah Ali Khamenei said US efforts to kickstart nuclear talks with the Islamic Republic are a ploy that will lead to tighter sanctions on the nation’s economy.
Meanwhile, the Energy Information Administration slashed its prediction for a surplus for this year and halved its outlook for a glut in 2026, citing the prospect of diminished flows from Iran and Venezuela.
Oil Prices:
- WTI for April delivery rose 2.2% to $67.68 a barrel in New York.
- Brent for May settlement advanced 2% to $70.95 a barrel.
by Bloomberg | Mia Gindis and Jacob Wendler
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas