Oil inched lower on limited fresh signs of escalating conflict in the Middle East, but prices hovered above monthly lows as technical support limited losses.
West Texas Intermediate’s most active June contract settled near $83 a barrel after plunging 1.9% earlier, as the 50-day moving average provided some support.
Still, with the US Congress moving to sanction Iran’s oil sector and the conflict between Israel and Iran remaining tense, prices may continue to see sharp swings. Last week, crude posted the biggest weekly drop since February.
“Buyers are waiting to see if crude will hold its 50-day moving average before increasing exposure,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. “Bullish sentiment has been burning hot into summer and many investors are already long heading into the summer driving season, leaving less ammunition to buy the dip on a sell off,” she added.
Even after recent declines, oil is roughly 14% higher this year, buoyed by OPEC+ supply curbs. Investors will be focusing on a slew of US economic data this week, including the Federal Reserve’s preferred measure of inflation, which will give more clues on the path for monetary policy.
Money managers are the most bullish on Brent since March 2021 as they snap up contracts to profit from any spikes. Meanwhile, oil call options — which profit when prices rise — posted a second consecutive week of record volumes.
Earnings from supermajors TotalEnergies SE, Chevron Corp. and Exxon Mobil Corp. are also due this week, as well as Reliance Industries Ltd. and Cnooc Ltd.
Prices:
WTI for June delivery fell to settle at $82.85 a barrel in New York.
Brent for June settlement fell 0.3% to settle at $87 a barrel.
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