Oil prices have been stagnant this week as traders grapple with bearish trends, including a rise in US inventories and a pick-up in demand that has fallen short of expectations.
US crude inventories have risen by nearly 24 million barrels in the past two weeks, adding to an already oversupplied market. Diesel prices also hit the lowest levels since prewar levels as inventories rise and Russia finds ways to export significant amounts of the fuel, said Dennis Kissler, senior vice president of trading at BOK Financial Securities.
Meanwhile, a measure of US demand (the four-week average of gasoline product supplies) was at its second-lowest seasonal level since 2014. The trend is dampening some of the optimism that China’s demand will pick up. will recover after the end of Covid Zero policies. Crude oil futures on Friday closed 2 cents lower than where they ended last week, which saw prices fall 4.2%.
Futures have remained in a $10 range since late 2022, forming what is known as a symmetrical triangle pattern, as optimism about China’s reopening meets concerns about monetary tightening. The technical pattern suggests that crude oil may continue to consolidate before breaking out.
“Many traders also believe that inflation is starting to dampen demand for fuel in the US,” Kissler said. “The wild card will be whether the effects of the slowdown move into Asia.”
Prices:
- WTI for April delivery rose 93 cents to settle at $76.32 a barrel in New York.
- Brent for April settlement rose 95 cents to settle at $83.16 a barrel.
