Oil’s rally stalled in its third day as lagging fuel demand undercut a wave of algorithmic buying.
West Texas Intermediate fell to below $73 a barrel amid a drop in distillate futures. Demand for diesel, which is used both as an industrial and heating fuel, continues to languish at seven-year seasonal lows, a sign of lackluster economic activity.
“We’re in a milder period seasonally and we’ve had a mild winter in the Northeast, so I’m not surprised there’s weakness,” said Rebecca Babin, senior energy trader at CIBC Private Wealth.
Earlier, oil rose above $74 a barrel after a government report showed US inventories fell by more than 7 million barrels last week. The momentum-driven commodity trading advisers helped drive crude oil’s recovery as traders returned to buying oil futures.
Oil has been bolstered by supply risks and rising demand from China as the nation recovers from pandemic lockdowns. Uncertainty, however, continues to weigh on the market, following a banking crisis that has affected institutions in both the US and Europe.
Prices:
- WTI for May delivery was down 23 cents at $72.97 a barrel in New York.
- Brent for May settlement fell 37 cents to settle at $78.28 a barrel.
