Short on oil, expect prices to pull back: Commodities analyst
Oil fell the most in three weeks as the dollar rose and investors fled from risk assets ahead of U.S. economic data scheduled for later today.
West Texas Intermediate fell as much 3 per cent, the biggest decline since mid-March, to slip below US$80 a barrel. Demand concerns are once again at the forefront of the market, blunting the impact of OPEC production cuts scheduled to begin in May. A widely-watched economic survey from the Federal Reserve will be closely watched for insight into the health of the U.S. economy, along with the path of monetary policy.
Traders are also looking ahead to U.S. stockpile data, with industry reports estimating a seventh straight weekly drop for inventories at the nation’s largest storage hub at Cushing, Oklahoma.
- WTI for May delivery dropped US$1.59 to US$79.27 a barrel at 9:41am in New York.
- Brent for June settlement fell US$1.62 to US$83.15 a barrel.
Crude recently rebounded after tumbling to a 15-month low in mid-March following turmoil in the banking sector. A surprise announcement by OPEC+ on production cuts and curbed Iraqi flows have underpinned some of the gains. After oil inventories crept up over the past year, the producers’ group is looking to force consumers to take oil out of storage, helping underpin prices even amid tentative demand growth.