Oil prices stagnated this week as traders confront bearish trends including rising U.S. stockpiles and a rebound in demand that hasn’t lived up to expectations.

U.S. crude inventories have grown by almost 24 million barrels in the last two weeks, adding to an already oversupplied market. Diesel prices also hit their lowest since pre-war levels as inventories rise and Russia finds ways to export significant amounts of the fuel, said Dennis Kissler, senior vice president of trading at BOK Financial Securities.

Meanwhile, a proxy for U.S. demand — the four-week average of gasoline product supplied — was at the second-lowest seasonal level since 2014. The trend is dulling some of the optimism that China’s demand will rebound following the end of Covid Zero policies. Crude futures on Friday closed 2 cents lower than where they ended last week, which saw prices decline 4.2 per cent.

Futures have been stuck in a US$10 range since the end of 2022, forming what’s known as a symmetrical triangle pattern, as optimism over China’s reopening contends with concerns about monetary tightening. The technical pattern suggests crude may continue to consolidate before breaking out. 

“Many traders also believe inflation is beginning to slow fuel demand in the U.S.,” Kissler said. “The wild card will be if the slowing effects move into Asia.”

Prices:

• WTI for April delivery rose 93 cents to settle at US$76.32 a barrel in New York.
• Brent for April settlement rose 95 cents to settle at US$83.16 a barrel.