Oil’s recovery continued to cool with investors looking for a new catalyst to support further buying.
While some physical crude loads are commanding high premiums and fast time spreads are the widest in a year, indicating supply shortages, macro headwinds are limiting gains. The dollar has risen to an eight-month high, reducing the appeal of commodities priced in the currency, and expectations of a rate hike are fueling risk sentiment across markets.
Still, oil has risen about 25% since June and is headed for the biggest quarterly gain since March 2022 on supply curbs from OPEC leaders + Saudi Arabia and Russia. The recovery led hedge funds to increase their bullish bets on WTI to the highest since February 2022 and has returned to talk of $100 a barrel crude oil.
Traders are now looking to China for signs of increased demand as the world’s top oil importer prepares for the Golden Week holiday from Friday. More than 21 million people are expected to fly during the eight-day holiday, after record passenger air traffic in July and August fueled oil consumption.
Prices:
- West Texas Intermediate for November delivery fell 35 cents to settle at $89.68 a barrel in New York.
- Brent for November settlement was up 2 cents at $93.29 a barrel.
-With the assistance of Alex Longley.
