Russia Supply and US Stock Plague Oil Markets
2024-05-24
Summary:
Friday's oil prices held steady as investors digested the Fed's rate comments amidst inflation concerns, supported by seasonal fuel demand.
Oil prices were steady early in the session on Friday as players digested of the Fed's latest comments on interest rates amid sticky inflation, while firming seasonal fuel demand lent support.
Both benchmarks settled at multi-month lows on Thursday, with Brent crude futures closing at their weakest point since January and WTI futures hitting the lowest in three months.
US crude oil inventories rose unexpectedly last week due to a big adjustment for unaccounted barrels, while gasoline stockpiles fell, the EIA said.
Gasoline demand reached its highest level since November. The summer driving season and demand for the motor fuel kicks off around the Memorial Day holiday this weekend.
Russia said earlier this week that it exceeded its OPEC+ production quota in April for "technical reasons", a surprise move that analysts and industry sources say shows Moscow faces challenges in curbing output.
Putin said after his visit to China that Russia could deliver oil as well as gas to China along a planned route via Mongolia. The two countries are yet to reach agreement on the pipeline though.
Brent crude was retesting the low it hit in 15 May below $81 – a strong support limiting the decline. The price should overcome 200 SMA and then $84 to pave the way for a reversal.
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