(Bloomberg) — Oil held a fourth weekly drop as issues over the US financial system and China’s slower-than-expected restoration weighed on the outlook.
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West Texas Intermediate futures traded close to $70 a barrel after the longest run of weekly losses since September. Negotiations are persevering with to avert a US default associated to the debt ceiling, with Treasury Secretary Janet Yellen warning that the division may run out of cash as quickly as June 1.
Oil is down 13% for the 12 months as fears over a attainable US recession outweigh provide cuts pledged by OPEC+. Demand for bodily barrels additionally seems weak, whereas refinery margins — the income that refiners make from processing crude into petroleum merchandise like diesel and gasoline — stay low.
Hedge funds and cash managers have amassed the biggest brief place in international benchmark Brent since July 2021, though speculators are much less bearish on US crude. Traders will likely be watching key financial information from China this week for clues on the tempo of the nation’s restoration, in addition to a month-to-month report from the Worldwide Vitality Company due Tuesday.
“Sentiment within the oil market stays destructive with an unsure demand outlook and issues over the US debt ceiling,” mentioned Warren Patterson, head of commodities technique for ING Groep NV. “The market will doubtless be looking for any potential demand revisions within the IEA’s month-to-month market report.”
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