Oil Edges Lower as US Economic Data Undercuts OPEC+ Deal Gains
Oil edged lower as tepid US economic data undercut OPEC+’s progress on a deal to keep supply shuttered.
West Texas Intermediate slipped beneath $70 a barrel, giving up some of Tuesday’s 2.7% gain, after US services activity grew in November at the slowest pace in three months, prompting concerns about demand in the world’s biggest oil-consuming nation. Brent traded near $73.
The data weakened the bullish momentum that had built since OPEC+ delegates said the producer group is nearing an agreement to push back a plan to revive output by an additional three months. The US also on Tuesday sanctioned 35 entities and ships that it said play a critical role in the shadow fleet transporting illicit Iranian oil to foreign markets.
Official US crude and fuels inventory data released Wednesday provided a mixed picture of the market. While oil inventories fell by 5.07 million barrels last week, gasoline stockpiles had a sizable gain and distillate inventories rose the most since July, signaling weaker demand.
The US economy is “lukewarm right now, which probably implies that we’ll get another rate cut when the Fed meets in a couple of weeks,” said Brian Kessens, a managing director at Tortoise Capital Advisors LLC. “But no one is is looking to go out and predict some sort of a surge in commodity prices at this point.”
Crude has been locked in a band of roughly $6 since the middle of October, buffeted by the imminent Donald Trump presidency, geopolitical tensions in the Middle East and Ukraine and a lackluster demand outlook from top importer China. Amid widespread concern the global market faces a glut next year, OPEC+ is due to finalize supply plans at an online meeting on Thursday.
WTI for January delivery fell 0.6% to $69.55 a barrel at 11:32 a.m. in New York.
Brent for February settlement slid 0.5% to $73.28 a barrel.
Source : Bloomberg
