Oil’s recovery to $95 a barrel faltered as investors cashed in and the market settled into overbought territory.
Benchmark U.S. crude fell nearly $2 after rising to the highest level in more than a year. While declining oil inventories at Cushing, Oklahoma, the delivery point for US futures, have lifted key price indicators, the rally hit technical resistance with the 14-day relative strength index indicates a correction.
Still, the outlook is upbeat as supply cuts from Saudi Arabia and Russia continue to tighten the global market. The closer schedules for global benchmark WTI and Brent are at the late end as traders pay excessive premiums to keep crude supplies local. Options trading is showing concerns about larger price swings.
West Texas Intermediate has risen about 30% since late June and is nearing its biggest quarterly gain since June 2020, when prices surged in the early months of the pandemic. Brent has topped $97 in intraday trading this week.
Earlier this month, OPEC forecast a market shortfall of up to 3 million barrels of crude oil per day in the fourth quarter. With demand resilient in the US and China, many in the market now see $100 oil as inevitable, even as dollar rallies and concerns about high global interest rates persist.
Prices:
- WTI for November delivery fell 2% to close at $91.71 in New York.
- It touched $95.03 earlier, the highest since August 2022.
- Brent for November settlement was down 1% at $95.27.
Demand appears to be holding up amid higher prices. Global consumption of transportation fuels rose last week, boosted by Chinese trucking activity and an increase in international travel ahead of the Golden Week holiday, JPMorgan Chase & Co. said.
