Oil steadied as traders took stock following a two-day slump, amid persistent concerns over demand as the global economy falters.
(Bloomberg) — Oil steadied as traders took stock following a two-day slump, amid persistent concerns over demand as the global economy falters.
West Texas Intermediate futures traded above $74 a barrel, having erased all of the gains since key OPEC+ nations announced surprise output cuts at the start of the month. Fuel markets are showing weakness and some refiners in Asia are considering reducing processing as margins shrink.
Oil has also been tracking wider markets in recent sessions, with higher equities in Europe and the US on Thursday providing some boost for crude. Investors are gearing up for US Federal Reserve and European Central Bank interest rate decisions next week for clues on the health of the economy and the path of monetary policy.
“Lingering and renewed liquidity fears are impacting broader equities and commodities, with oil in the bearish cross hairs,” said Louise Dickson, head of oil analytics research at Rystad Energy AS in Oslo. “On the fundamentals side, there are of course very acute short-term concerns.”
Concerns over slowing demand overshadowed a largely bullish US stockpile report on Wednesday. The nation’s crude inventories shrunk by 5.05 million barrels last week — a second weekly draw — while gasoline and distillate supplies declined.
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