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Wednesday, May 18, 2022

Oil firms after two days of losses; eyes on Trump address

Oil firms after two days of losses; eyes on Trump address© Reuters. FILE PHOTO: An oil pump jack can be seen in Cisco, Texas

SYDNEY (Reuters) – Oil prices edged higher for the first time in three sessions on Wednesday, although concerns over the outlook for the global economy capped gains.

U.S. West Texas Intermediate (WTI) crude futures were at $53.76 per barrel at 2338 GMT, up 10 cents, or 0.2 percent, from their last settlement. They closed down 1.7 percent on Tuesday.

International futures had yet to trade, after closing down 0.8 percent in the previous session.

Global economic worries have weighed on market sentiment in recent days, offsetting support from signs that global supplies are tightening.

With a nervous market, traders are focused on the U.S. State of the Union address by President Donald Trump at 0200 GMT.

“Anything out of the State of the Union that hints at the U.S.-China deal not working out, or more anti-trade rhetoric would be a negative for energy prices as demand would be lower if global growth keeps being downgraded,” said Alfonso Esparza¬†senior market analyst, OANDA.

U.S. sanctions on Venezuela have been viewed as supportive for prices by helping tighten global supplies. A flotilla loaded with Venezuelan oil has formed in the Gulf of Mexico, some holding cargoes bought ahead of the latest U.S. sanctions on Venezuela and others whose buyers are weighing who to pay.

The Organization of the Petroleum Exporting Countries and its allies, including Russia, agreed to production cuts effective from last month to beat back supply growth.

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Source: Investing.com

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