Oil snapped its longest losing streak this year, with investors piling back into the commodity after futures edged into oversold territory.
Crude oil’s nine-day relative strength index, a key indicator of technical momentum, fell below 32 this week as weak US supply data and concerns about continued rate hikes of interest caused the commodity to go on six consecutive losing sessions. A relative strength index of 30 indicates that the market is oversold. Thursday’s bounce also defied another bearish data release that showed US crude supplies rose to the highest level since May 2021.
Crude still remains within reach for the year, with optimism about a potential rebound in Chinese consumption later in the year establishing a floor under prices. Still, several Wall Street banks have tempered their bullish outlook for prices, with Morgan Stanley the latest to cut its forecasts.
“We’re stuck in this shoulder season for oil where we’re not in the summer seasons yet, we’re coming out of the winter seasons and the markets are timing,” said Rob Haworth, senior investment strategist at US Bank Wealth Management.
Prices:
- WTI for April delivery rose $1.44 to settle at $75.39 a barrel in New York.
- Brent for April settlement gained $1.61 to settle at $82.21 a barrel.
(with the assistance of Julia Fanzeres and Vildana Hajric)
