Brent oil was on track for its worst run of quarterly losses in data going back more than three decades as persistent concerns over the demand outlook weighed on prices.
(Bloomberg) — Brent oil was on track for its worst run of quarterly losses in data going back more than three decades as persistent concerns over the demand outlook weighed on prices.
Futures in London traded above $74 a barrel, down for a fourth quarter, while West Texas Intermediate was heading for its first back-to-back decline since 2019. The market has faced a raft of headwinds, from aggressive interest-rate hikes to China’s sluggish economic recovery and resilient Russian supply.
That’s culminated in a lasting bearish tone which has managed to overwhelm any optimism around supply cuts by Saudi Arabia or robust summer demand. A recent short-lived uprising in Russia also failed to spark meaningful gains.
The outlook for the second half is mixed. There is some optimism the market will tighten and that will support prices, but Federal Reserve Chair Jerome Powell and some of his peers said on Wednesday that more interest-rate increases are likely, a measure that will drag on energy consumption.
RBC Capital Markets LLC says the market should tighten next month, in part due to the end of seasonal maintenance, but “apathy will set in for the balance of the year” if that doesn’t materialize.
Oil markets “will be walking on a tightrope, as leading indicators suggest that downside risks to growth remain on the table over coming months,” said Yeap Jun Rong, a market strategist for IG Asia Pte. in Singapore. Prices are unable to find much conviction for a more sustained bounce, he added.
To get Bloomberg’s Energy Daily newsletter direct into your inbox, click here.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.