Oil futures: Brent slips below $87/b as sentiment cools
Quantum Commodity Intelligence – Crude oil futures Thursday were drifting lower amid recessionary fears in the US and Europe, having tested yearly highs after several bullish pricing signals during the previous session.
June ICE Brent futures were trading at $86.28/b (1805 GMT), compared to Wednesday's settle of $87.33/b.
At the same time, May23 NYMEX WTI was trading $82.37/b, versus Wednesday's close of $83.26/b.
However, the market generally remains upbeat, having rallied around 25% from the lows registered at the height of the banking crisis last month, with some of Thursday's losses attributed to profit-taking.
For most of the session, oil markets largely consolidated the week's solid gains after Consumer Price Index (CPI) data showed inflation in the US cooling, while the latest EIA report revealed seasonally strong gasoline demand.
EIA data also showed headline US crude oil stocks increasing, but a drawdown in stockpiles at the Cushing delivery point for WTI helped underpin sentiment.
Oil prices also found support after the latest comments from Energy Secretary Jennifer Granholm, indicating the US could begin buying back crude to restock the Strategic Petroleum Reserve this year.
"Crude prices are rallying after a moderating inflation report was followed by an EIA report that highlighted tightness at Cushing and strong gasoline demand. In addition to a double dose of bullish reports, oil got a boost from Energy Secretary Granholm's comment that said the US wants to soon bring back the SPR back to pre-Ukraine War levels," said Ed Moya, senior market analyst at brokerage Oanda, commenting after Wednesday's price rally.
However, Moya noted there was no specific timeline on SPR restocking or price levels, having previously indicated the administration would be crude buyers in the WTI $67-$72/b range.
OPEC
Meanwhile, OPEC has maintained its overall demand forecast for 2023, despite lowering the outlook for North America and Europe.
The producer alliance expects crude demand to grow by 2.3 million bpd this year, averaging around 101.9 million bpd.
China remains the primary driver, underlined by Thursday's OPEC report forecasting that China's oil demand is now expected to average 15.61 million bpd this year, up by 760,000 bpd year-on-year.
The organisation trimmed its forecast for Europe and the US by a combined 130,000 bpd from its previous report in March, tipping Europe into negative growth for 2023, which weighed on flat prices.
