Commodities and Futures News

Recession Fear Drives US Oil Below $100; Inventory Data Awaited

2022.05.10 22:30

Recession Fear Drives US Oil Below $100; Inventory Data Awaited

By Barani Krishnan

Investing.com — For a second time in a fortnight, U.S. crude prices broke below the $100-per barrel support, even ending under that mark on Tuesday. 

And once again, oil bulls will likely be counting on weekly U.S. inventory data to restore the market’s upside.

Brent crude, the London-traded global benchmark for oil, settled down $3.48, or 3.3%, at $102.46 a barrel, after an intraday low at $101.73. 

After a 6% rally in two previous weeks on speculation that Europe was nearing a much-awaited ban on Russian oil, Brent had given back 9% week-to-date on worries that the United States might fall into a recession from aggressive rate hikes by the Federal Reserve to beat inflation growing at its fastest pace in 40 years.

But it was U.S. crude that was on the radar of oil bears.

New York-traded West Texas Intermediate, or WTI, the benchmark for U.S. crude, settled Tuesday’s trade down $3.33, or 3.2%, at $99.76. 

WTI hit a session low of $98.91 earlier, its lowest since the $97.06 bottom of April 26. 

The U.S. crude benchmark gained almost 8% in two previous weeks of trade to concede almost 10% within the first two days of this week.

“There’s clearly a huge amount of worry about a recession in the markets at the minute as central banks continue to aggressively tighten against the backdrop of a slowing economy and a cost-of-living crisis,” said Craig Erlam, analyst at online trading platform OANDA. “There’s a lot of pressure on household budgets and it’s only going to intensify as the year progresses which will take its toll.”

Even so, the unwillingness of global oil exports alliance OPEC+ to turn the taps on more is keeping oil prices “very elevated but at a little over $100”, he noted, adding that it was “perhaps a sign that we should get used to these higher prices.”

Market participants were also on the lookout for U.S. weekly oil inventory data, due after market settlement from API, or the American Petroleum Institute.

The API will release at approximately 4:30 PM ET (20:30 GMT) a snapshot of closing balances on U.S. crude, gasoline and distillates for the week ended May 6. The numbers serve as a precursor to official inventory data on the same due from the U.S. Energy Information Administration on Wednesday.

For last week, analysts tracked by Investing.com expect the EIA to report a crude stockpile drop of 457,000 barrels, versus the 1.3-million barrel rise reported during the week to April 29.

On the gasoline inventory front, the consensus is for a draw of 1.57 million barrels that would add to the 2.23 million-barrel decline in the previous week.

With distillate stockpiles, the expectation is for a drop of 1.31 million barrels versus the prior week’s deficit of 2.34 million.

 

Source

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 104,022.87 0.15%
ethereum
Ethereum (ETH) $ 2,513.56 0.90%
tether
Tether (USDT) $ 1.00 0.00%
xrp
XRP (XRP) $ 2.40 0.35%
bnb
BNB (BNB) $ 656.41 1.40%
solana
Solana (SOL) $ 175.14 0.93%
usd-coin
USDC (USDC) $ 1.00 0.00%
dogecoin
Dogecoin (DOGE) $ 0.240853 0.31%
cardano
Cardano (ADA) $ 0.818498 0.01%
tron
TRON (TRX) $ 0.266425 0.44%
staked-ether
Lido Staked Ether (STETH) $ 2,510.40 0.89%
sui
Sui (SUI) $ 4.08 1.71%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 103,927.85 0.15%
chainlink
Chainlink (LINK) $ 17.14 1.28%
avalanche-2
Avalanche (AVAX) $ 25.12 0.75%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,021.49 0.94%
shiba-inu
Shiba Inu (SHIB) $ 0.000017 0.59%
stellar
Stellar (XLM) $ 0.311635 0.43%
pi-network
Pi Network (PI) $ 1.27 30.91%
hedera-hashgraph
Hedera (HBAR) $ 0.209305 1.90%
the-open-network
Toncoin (TON) $ 3.47 0.11%
hyperliquid
Hyperliquid (HYPE) $ 24.59 2.78%
bitcoin-cash
Bitcoin Cash (BCH) $ 409.04 2.30%
usds
USDS (USDS) $ 1.00 0.00%
polkadot
Polkadot (DOT) $ 5.14 0.40%
leo-token
LEO Token (LEO) $ 8.38 0.98%
litecoin
Litecoin (LTC) $ 100.96 3.18%
weth
WETH (WETH) $ 2,510.25 1.02%
monero
Monero (XMR) $ 336.90 3.95%
pepe
Pepe (PEPE) $ 0.000014 10.25%
wrapped-eeth
Wrapped eETH (WEETH) $ 2,680.67 1.07%
bitget-token
Bitget Token (BGB) $ 4.86 3.61%
binance-bridged-usdt-bnb-smart-chain
Binance Bridged USDT (BNB Smart Chain) (BSC-USD) $ 1.00 0.08%
coinbase-wrapped-btc
Coinbase Wrapped BTC (CBBTC) $ 103,934.85 0.31%
ethena-usde
Ethena USDe (USDE) $ 0.99984 0.04%
whitebit
WhiteBIT Coin (WBT) $ 30.13 0.20%
uniswap
Uniswap (UNI) $ 7.02 3.23%
bittensor
Bittensor (TAO) $ 471.68 3.36%
near
NEAR Protocol (NEAR) $ 3.18 3.13%
aptos
Aptos (APT) $ 5.98 2.01%
dai
Dai (DAI) $ 0.99996 0.02%
aave
Aave (AAVE) $ 221.00 1.07%
ondo-finance
Ondo (ONDO) $ 1.06 0.11%
okb
OKB (OKB) $ 55.22 0.39%
kaspa
Kaspa (KAS) $ 0.122824 15.20%
internet-computer
Internet Computer (ICP) $ 5.83 1.67%
ethereum-classic
Ethereum Classic (ETC) $ 20.17 0.06%
blackrock-usd-institutional-digital-liquidity-fund
BlackRock USD Institutional Digital Liquidity Fund (BUIDL) $ 1.00 0.00%
susds
sUSDS (SUSDS) $ 1.05 0.01%
crypto-com-chain
Cronos (CRO) $ 0.09922 3.49%