Oil direction is down
Oil fell modestly as risk aversion in markets countered the decline in US inventories.
Brent crude oil was trading around $88 a barrel after falling 0.5 percent on Wednesday, while U.S. crude was near $83. The decline came despite data showing that nationwide crude stocks fell by a more-than-expected 6.37 million barrels last week as refineries ramped up processing and exports increased.
In broader markets, Asian stocks retreated following concerns about the US tech sector, while Meta Platforms’ disappointing outlook led to declines. At the end of the week, the Fed’s preferred inflation indicator will give clues about the path that monetary policy will follow.
Crude oil remains high this year, helped by OPEC+ supply cuts and tensions in the Middle East; However, it retreated from its recent peaks above $90 per barrel as geopolitical risks in the region decreased. The trend in options remains bearish towards sell-offs as the world’s largest oil exchange-traded fund (US Oil Fund) reported its biggest daily outflow on record.
IG Asia Pte. “As markets look beyond supply disruption risks from geopolitical tensions, oil prices may take a cue from the cautious risk environment. Still, for now, the upward trend continues since the beginning of the year,” said Market Strategist Yeap Jun Rong.