Brent crude posted its longest period of quarterly losses in data dating back more than three decades amid robust supplies and lingering concerns about demand.
Oil has faced concerns about a possible global economic slowdown as well as a lackluster recovery in China. Robust crude exports from Russia and Iran have kept supplies ample, offsetting a potential pick-up in summer demand and output cuts by the Organization of the Petroleum Exporting Countries.
The global benchmark fell below $75 a barrel on Friday, marking its fourth consecutive quarterly loss, while West Texas Intermediate posted its first consecutive quarterly declines since 2019.
The outlook for the second half is mixed. Some analysts have predicted that the market will tighten, in part due to the end of seasonal maintenance. However, US Federal Reserve Chairman Jerome Powell and some of his colleagues have said they are likely to raise interest rates further, which would drag down energy consumption.
“We expect market apathy and a lack of risk-off to further worsen if the global physical market does not tighten,” Royal Bank of Canada analysts Michael Tran and Helima Croft wrote in a note. “This could end up being a lost year for the oil market as risk remains on the sidelines.”
On Friday, Russian Deputy Prime Minister Alexander Novak ordered officials to consider introducing quotas for the export of oil products, according to a government statement. If the country enforces the quota, it could reduce global supply.
Prices:
- WTI for August delivery rose 78 cents to settle at $70.64 a barrel in New York.
- Brent for August settlement, which expires on Friday, advanced 56 cents to settle at $74.90 a barrel.
- The most active September contract rose 90 cents to settle at $75.41 a barrel.
