Oil Recovers From Lurch Back Below $60 as Wider Markets Rally
Brent crude erased losses as US equity markets strengthened.
The benchmark edged up 0.7%, with equities rallying on better-than-expected tech earnings and signs the Trump administration is stepping back from its harshest tariff threats. Brent earlier slid below $60 a barrel, extending April’s decline, amid economic-growth concerns and indications of higher OPEC+ supply.
OPEC+ last month rocked the market with its surprise decision to pump more than expected, just as other producers including Guyana also ramp up output.
Reuters reported Wednesday that Saudi officials have told allies the kingdom can endure a period of depressed prices, reinforcing expectations it will steer OPEC+ to another supply surge at a meeting May 5.
“We’ve been oversold the last few days and there’s a lot of speculation about Saudi flooding the market next week,” said Joe DeLaura, global energy strategist at Rabobank. “Traders are taking a breather and pulling off some risk before the weekend and OPEC meeting.”
Despite the pressure on prices, the market faces supply risks.
Trump’s Senate ally Lindsey Graham said he had the commitment of 72 colleagues for a bill that would enact “bone-crushing” sanctions on Russia, and tariffs on countries taking its oil, if Vladimir Putin didn’t engage in serious talks to end the war in Ukraine.
The US has also been repeatedly sanctioning entities involved in the transportation of Iranian crude, and targeting Venezuelan shipments, too.
Yet on the demand side, data Wednesday showed the US economy shrinking for the first time since 2022, while factory activity in China slipped into the worst contraction since 2023. That overshadowed more bullish figures showing US crude and gasoline inventories dropped last week.
Brent for July settlement traded at $61.46 as of 3:13 p.m. in London
West Texas Intermediate was at $58.68 a barrel.
Source : Bloomberg
