Oil fell for a second day as traders focused on bearish economic indicators and weakness in underlying physical markets.
West Texas Intermediate settled around $70 a barrel at the start of Thursday’s session. Worries about a recession and any subsequent drop in oil consumption weighed on markets, traders said. The technical sell-off further exacerbated declines after data showed U.S. jobless claims rose to the highest since October 2021 and weakness in the Chinese economy.
“WTI crude will need a couple of good catalysts to send prices above the $74 level,” said Ed Moya, senior market analyst at Oanda. “We could see oil consolidating between $68 and $74 in the short term.”
Weak physical crude markets and rising inventories at the Cushing, Oklahoma storage hub pushed the spread between near-term U.S. crude futures into a market structure known as contango, indicating ample supply in short term.
These factors dampened bullish trends, including signs of moderating US inflation, a bullish monthly OPEC outlook and a series of Canadian supply disruptions to Iraq.
Prices:
- WTI for June delivery fell $1.69 to settle at $70.87 a barrel in New York.
- Brent for July settlement fell $1.43 to settle at $74.98 a barrel.
– With the assistance of Natalia Kniazhevich and Sri Taylor.
