Oil settled little changed after repeated signs of slowing demand led to a three-day slide for the commodity.
Saudi Arabia cut the official selling price of its crude to Asian customers for the first time in four months after weak Chinese manufacturing data indicated demand on the continent remains sluggish. West Texas Intermediate settled below $69, extending a two-week slide, after falling as much as 7.2% in early trading in Asia.
“Crude oil is trading in the vortex of negative sentiment, increased volatility, macro fears and physical market stagnation,” said Rebecca Babin, senior energy trader at CIBC Private Wealth. “Overnight volatility underscores the view that crude oil may not be investable for energy investors at this time and will remain in the clutches of systematic trading strategies.”
The recent decline, which includes an 11% drop this week, has pushed the commodity into oversold territory on the nine-day relative strength index, suggesting a technical correction could be coming soon.
“It’s usually at this point of exasperation that it provides the best entry points,” Babin added.
Crude has fallen 15% this year, showing that a plan by the Organization of the Petroleum Exporting Countries and its allies to regain control of the market by cutting output starting this month is still not working. The losses have been driven by concerns that global growth is slowing, potentially hurting energy demand.
Prices:
- WTI for June delivery fell 4 cents to settle at $68.56 a barrel in New York.
- Brent for July settlement rose 17 cents to settle at $72.50 a barrel.
Oil has also come under pressure as flows from Russia have proved more resilient than expected, despite Moscow’s pledge to cut supplies and a web of Western sanctions imposed after the Ukraine invasion. Deputy Prime Minister Alexander Novak reaffirmed the country’s commitment to comply with the announced cuts.
