Oil snapped its longest losing streak this year, with investors piling back into the commodity after futures approached oversold territory.

Crude’s nine-day relative strength index, a key technical momentum indicator, dipped below 32 this week as bearish U.S. supply data and concerns about continued interest rate hikes sent the commodity to six straight losing sessions. A relative strength index of 30 indicates the market is oversold. Thursday’s rebound also defied another release of bearish data that showed U.S. crude supplies swelling to the highest level since May 2021. 

Crude still remains rangebound for the year, with optimism about a potential rebound in Chinese consumption later in the year setting a floor under prices. Still, several Wall Street banks have tempered their bullish outlook for prices, with Morgan Stanley the latest to trim its forecasts.

“We’re stuck in this shoulder season for oil where we’re not yet into summer seasonals, we’re getting out of winter seasonals and the markets are marking time,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.

Prices:

• WTI for April delivery rose US$1.44 to settle at US$75.39 a barrel in New York.
• Brent for April settlement gained US$1.61 to settle at US$82.21 a barrel.