Oil hit a three-week low as light summer trading left the commodity at the mercy of broader markets.
West Texas Intermediate futures are down 4.6% this week, poised to snap a seven-week winning streak. Equities, rocked by China’s stock market woes, dragged oil lower, while signs that more interest rate hikes were likely failed to boost confidence in demand. Even a sharp decline in US crude stockpiles and signs of tightening supplies in the Middle East and North Sea failed to lift prices.
“Crude oil prices are heavy as Wall Street gets nervous about the outlook for the world’s two largest economies: the US and China,” said Ed Moya, senior market analyst at Oanda. “More Traders Realize U.S. Soft Landing Prospects May Not Be A Good Thing For Conquering Inflation.”
Before this week’s retreat, oil had risen for more than a month on supply cuts from OPEC+ hubs Saudi Arabia and Russia, as well as estimates that global oil consumption crude works at a record pace. Although propagation times have decreased in tandem with crude benchmarks, they remain lagging, implying a short-term supply constraint.
Reflecting this underlying positivity, UBS Group AG raised its year-end Brent price forecast by $5 to $95 a barrel.
Prices:
- WTI for September delivery fell $1.61 to settle at $79.38 a barrel in New York.
- Brent for October settlement was down $1.44 at $83.45 a barrel.
-With the assistance of Yongchang Chin, Grant Smith and Chunzi Xu.
