Oil edged lower, extending three days of losses as traders weighed an improving supply outlook in a market grappling with a shaky economic outlook.
(Bloomberg) — Oil edged lower, extending three days of losses as traders weighed an improving supply outlook in a market grappling with a shaky economic outlook.
West Texas Intermediate futures traded near $78 a barrel, extending Wednesday’s 1.8% drop. The Biden administration is in talks with Venezuela to explore a temporary lifting of sanctions that have hindered its oil sales. That comes on top of a surge in exports from Iran this month.
A rally in crude that got underway in late June has faltered over the last couple of weeks due to a deteriorating economic situation in China, signs that US interest rates will need to stay higher for longer and dismal economic data in Europe. That’s overshadowed a tightening market driven by Saudi Arabian and Russian supply cuts.
The curbs have helped drive a sharp slump in global oil inventories over the past month, according to data from Kpler. In the US, crude stockpiles fell by 6.1 million barrels last week to the lowest since December, the Energy Information Administration said on Wednesday.
“We see oil prices trading range-bound in the short term as the tug of war between demand fears and tighter supply continues,” said Han Zhong Liang, investment strategist at Standard Chartered Plc. WTI will likely stay around $79 a barrel for now, he said.
Some investors have been pulling money out oil investment vehicles in recent days. The US Oil Fund ETF reported its biggest daily outflow since 2020 on Wednesday, with more than $180 million being pulled from one of oil market’s largest exchange traded products.
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