Oil prices fell for the second day in a row after investors focused on pessimistic economic indicators and signs of weak demand in the main direct trading market.
West Texas Intermediate crude prices settled near the $70 per barrel level, after fluctuating in the beginning of Thursday’s trading. Traders said that the markets were negatively affected by the risks of economic recession and the consequent decline in oil consumption.
Selling operations that depend on the movement of technical indicators after that contributed to the exacerbation of the deterioration in prices after the release of figures about the increase in jobless claims in the United States to the highest level since October 2021, and the weakness in the performance of the Chinese economy, according to the American “Bloomberg” agency.
Prices recovered some of their losses in post-settlement trading, following US Energy Secretary Jennifer Granholm’s announcement that the government aims to buy oil to replenish the Strategic Petroleum Reserve after congressional authorization to withdraw from it expires next June.
Underperformance in the direct crude markets and an increase in inventories at the Cushing Storage Center in Oklahoma have pushed the margins of the nearest futures contract for US crude into an area known as the “contango”, where futures prices for the commodity are higher compared to the prices of the nearest contracts or spot prices, with ample supplies in the region. Short-term.
These factors weakened upward trends, including signs of moderation in the level of inflation in the United States, optimistic “OPEC” monthly expectations, and a series of supply disruptions from Canada to Iraq.