Market News
Oil Rally Fizzles After Futures Cross Into Overbought Territory - BLOOMBERG
BY Jordan Fitzgerald and Jack Wittels
(Bloomberg) -- Oil fell after futures crossed into overbought territory, though crude still notched a weekly gain amid shrinking US stockpiles and signs of rising fuel demand.
West Texas Intermediate dropped about 1% to slip below $81 a barrel on Friday. Crude had edged into overbought territory on Thursday after the Energy Information Administration’s weekly report showed strengthening demand for oil and refined products. US crude stockpiles declined 2.55 million barrels last week, and inventories of gasoline and diesel-type fuel decreased as well.
The US dollar also rallied on Friday, adding bearish pressure to commodity markets, and the expiration of WTI’s July futures on Thursday added volatility for crude.
Despite Friday’s dip, oil’s front-month futures advanced 2.9% this week in a second straight weekly gain.
Meanwhile, in a reminder of ongoing geopolitical risks, four refineries in southern Russia were targeted overnight, with 70 drones intercepted and destroyed over Crimea and the Black Sea and 43 over the Krasnodar region, the Russian Defense Ministry said.
Oil has risen from early June, when the Saudi energy minister underscored that OPEC+’s recent deal retains the option to pause or reverse production changes. Banks including Goldman Sachs Group Inc., ING Groep NV and Citigroup Inc. have flagged market deficits. A key trader metric for Brent futures is flashing signs of strength, with the prompt spread in the widest backwardation since April earlier Friday.
