Oil edged higher after struggling for direction throughout the session as traders weighed increased supplies and a shaky economic outlook.
West Texas Intermediate futures settled little changed near $79. With open interest hovering near January lows, prices saw exacerbated moves that largely tracked the path of equity markets. The US Oil Fund ETF reported its biggest daily outflow since 2020 on Wednesday, with more than $180 million being pulled from one of the oil market’s largest exchange-traded products.
Oil has dropped this week amid signs more barrels may be entering the market. The Biden administration is in talks with Venezuela to explore a temporary lifting of sanctions that have hindered its crude sales. That comes on top of a surge in exports from Iran this month.
Also undercutting June’s rally — which was driven by Saudi Arabian and Russian supply cuts — is the deteriorating economic situation in China, signs that US interest rates will need to stay higher for longer and dismal economic data in Europe.
Despite this week’s bearish mood, physical markets continue to remain tight. OPEC+ curbs have helped drive a sharp slump in global oil inventories over the past month, according to data from Kpler. And in the US, crude stockpiles fell by 6.1 million barrels last week to the lowest since December, the Energy Information Administration said Wednesday.
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