CETY - Oil slumps to weekly loss as supply cuts fail to counter demand worries
2023-04-21 19:45:33 ET
Crude oil closed with its first weekly loss in a month after erasing most of the gains that followed OPEC's surprise production cut, weighed by worries about demand linked to a weakening economic backdrop and hawkish Federal Reserve.
Recession fears from rising interest rates and the risk that Chinese demand could fall short of expectations over the coming months remain an overhang on oil prices.
Also, weakness in gasoline and diesel markets in Asia , as well as a decline in processing margins for some refiners, indicates demand for these refined products may be weaker than expected.
But Commerzbank's Carsten Fritsch thinks the market is " too complacent in the medium term : When production in Saudi Arabia and a number of other OPEC countries is scaled back from May, the market will be noticeably undersupplied again."
Front-month Nymex crude ( CL1:COM ) for June delivery ended the week -5.5% to $77.87/bbl, while June Brent crude ( CO1:COM ) closed -5.4% to $81.66/bbl.
ETFs: ( NYSEARCA: USO ), ( BNO ), ( UCO ), ( DBO ), ( SCO ), ( USL ), ( DRIP ), ( GUSH ), ( USOI ), ( NRGU )
Analysts said reports that Russian crude shipments remain strong despite sanctions and embargoes also held down oil prices, as Reuters reported April oil loadings from Russia's western ports are on track to reach their highest since 2019 at more than 2.4M bbl/day, despite promising to cut output.
The top energy stock ETF, the Energy Select Sector SPDR Fund ( NYSEARCA: XLE ), ended -2.5% for its worst week in a month.
Top 3 gainers in energy and natural resources during the past 5 days: ( ATLX ) +27.2% , ( DFLI ) +15.8% , ( USDP ) +11.2% .
Top 10 decliners in energy and natural resources during the past 5 days: ( VIA ) -28.1% , ( CETY ) -23.6% , ( SQM ) -19.9% , ( VGAS ) -19% , ( MP ) -18.8% , ( NINE ) -16.5% , ( SLI ) -15% , ( ALB ) -14.8% , ( BATL ) -14.1% , ( GATO ) -13.6% .
Source: Barchart.com
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Oil slumps to weekly loss as supply cuts fail to counter demand worries