Oil posted a gain after a muted session with traders on hold amid mixed economic signals.
West Texas Intermediate edged ahead after a two-day loss of more than 5% erased all gains from a surprise OPEC+ production cut. Oil has been tracking the broader markets in recent sessions as traders analyze a slew of economic data in hopes of interpreting the U.S. central bank’s upcoming rate hike decisions.
“The current earnings season, as well as macroeconomic reports in recent weeks, are sending mixed signals about recession risk,” said Raymond James analyst Pavel Molchanov. “That’s why oil prices are moving pretty wildly — there’s a lack of conviction in either direction.”
While first-month prices follow the whims of broader markets, recent supply and demand data have been mixed. The US released a largely bullish inventory report this week, with crude inventories falling by 5.1 million barrels last week. But demand in Asia is being tightly controlled with fuel markets showing weakness in refinery margins.
Despite the current weakness, many traders and analysts continue to bet that demand from the world’s largest oil importer, China, will lead to price gains for the rest of the year.
Meanwhile, US growth shrank in the first quarter by more than expected, while a measure of inflation rose to a one-year high. Investors are now gearing up for interest rate decisions by the US Federal Reserve and the European Central Bank next week for clues about the health of the economy and the path of monetary policy.
Prices:
- WTI for June delivery rose 46 cents to settle at $74.76 a barrel in New York.
- Brent for June settlement rose 68 cents to settle at $78.37 a barrel.
