Oil capped its longest streak of daily losses this year as hawkish signals from Federal Reserve officials raised concerns about a glut of crude building up in storage.
A significant rise in US inventories and a broader risk-off sentiment sparked by the prospect of continued Fed rate hikes weighed on oil this week. The headwinds were exacerbated by the federal government’s plan to continue to draw down the country’s Strategic Petroleum Reserve, with 26 million more barrels slated for the market.
Crude has been stuck in a narrow channel since early December. Expectations that China’s return from Covid-19 lockdowns will boost global demand are being tempered by a US economy that threatens to tip into recession under the weight of Fed hikes.
“Renewal of oil trading on the horizon is causing the market to turn cautious, calling for more cyclical evidence to invest in the structural bullish case,” analysts at Goldman Sachs Group Inc. wrote. led by Jeff Currie in a note to clients.
Prices:
- WTI for March delivery fell $2.15 to settle at $76.34 a barrel in New York.
- Brent for April settlement fell $2.14 to settle at $83 a barrel.
