New Jersey, Jul 19 (BNA): Oil prices ran out of steam on Tuesday after rising more than $5 a barrel in the previous session on fears that a rally in crude could trigger a demand-killing recession, slightly outstripping ongoing concerns about a supply shortage. .
Brent crude futures for September settlement were down 43 cents at $105.84 a barrel by 04:46 GMT. The contract rose 5.1 percent on Monday, the largest percentage gain since April 12.
West Texas Intermediate crude futures for August delivery fell 28 cents to $102.32 a barrel. The contract rose 5.1 percent on Monday, the biggest percentage gain since May 11.
The August WTI contract expires on Wednesday and the most active September futures contract was at $98.98 a barrel, down 44 cents.
Oil prices slid between supply worries as Western sanctions on Russian crude and fuel supplies due to the conflict in Ukraine disrupted trade flows to refiners and end users and growing fears that the central bank’s efforts to tame rising inflation could lead to a slashing recession. Future fuel demand, Reuters reported.
“The underlying imbalance between supply and demand is as narrow as ever,” Jeffrey Haley, chief market analyst at OANDA, said in a note. “Oil prices may have peaked, but they certainly don’t look like they are going down materially from here unless we get a big surprise from OPEC+.”
US President Joe Biden visited Saudi Arabia, the largest oil exporter, last week, hoping to strike a deal on increasing oil production to tame fuel prices.
However, officials from Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC), gave no clear assurances of securing an increase in production.
Warren Patterson, head of commodity strategy at ING, said in a note that the market had had time to absorb President Biden’s visit with the conclusion that it was unlikely that OPEC and its allies including Russia, known as OPEC+, would increase production more aggressively than planned over the long term. short.
Oil prices were supported by a weak US dollar on Tuesday, which stood near a one-week low, making US currency-dominated oil slightly cheaper for buyers holding other currencies.
“The dollar’s weakness has provided support for the market, along with the broader commodity complex,” ING’s Patterson said.
The outlook for oil inventories in the United States, the world’s largest oil consumer, was that crude and distillate supplies may have risen last week while gasoline stocks are likely to decline, according to a preliminary poll by Reuters.
HF