Crude oil futures struggled to find direction in the middle of the trading week, potentially signaling that the selloff is over and renewed buying efforts could be underway. Investors focused mainly on supplies, which supported the bullish case that the fundamentals are strong for traders. Could US crude reach $80 again?
June West Texas Intermediate (WTI) crude oil futures were flat at $77.07 per barrel at 16:12 GMT on Wednesday on the New York Mercantile Exchange. WTI prices are down about 2% this week, adding to their year-to-date decline of more than 4%.
Brent, the international benchmark for oil prices, edged downward midweek. July Brent crude futures dipped $0.11, or 0.14%, to $80.49 a barrel on London’s ICE Futures exchange. Brent is down nearly 3% this week and has slumped more than 6% so far this year.
According to the US Energy Information Administration (EIA), domestic inventories of crude oil declined by 5.054 million barrels for the week ending April 21, down from the previous week’s drawdown of 4.581 million barrels. This was also higher than the market estimate of -1.486 million barrels.
Gasoline supplies fell by 2.408 million barrels, down from last week’s build of 1.3 million barrels. This was also greater than the market forecast of -933,000 barrels.
Distillate stockpiles dropped 576,000 barrels while heating oil supplies rose 151,000 barrels.
Crude oil prices had been tanking on growing recession fears amid a plethora of weakening economic data points. However, a stronger-than-expected increase in durable goods orders for March helped ease some of these fears, although economists argue that this was before the banking turmoil.
In addition, the Federal Reserve, the Bank of England, and the European Central Bank are poised to raise interest rates at their upcoming meetings. The US central bank is expected to pull the trigger on one more quarter-point rate hike.
Oil found support in comments from Russian Deputy Prime Minister Alexander Novak who stated that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, are still efficient tools to coordinate global oil markets. This indicated that the cartel could slash production if prices continued to trend lower.
In other energy commodities, June natural gas futures tanked $0.159, or 6.89%, to $2.148 per million British thermal units (Btu). June gasoline futures edged higher by $0.0048, or 0.19%, to $2.5641 per gallon. June heating oil futures slipped $0.0211, or 0.86%, to $2.4266 a gallon.