Sunday, 4 June 2023

Oil Edges Higher After Weekly Gain as Banking Concerns Linger

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Oil extended a weekly gain as investors braced for further volatility amid the fallout from the banking crisis rippling across markets, Bloomberg reported.
West Texas Intermediate futures advanced toward $70 a barrel after closing almost 4% higher last week. As the banking turmoil sparks recessionary fears, US authorities are considering expanding an emergency lending facility, one of several options being weighed for now.
Oil remains on track for its steepest first-quarter loss since 2020 as a potential US recession, French strikes, and resilient Russian output weigh on the outlook. The rout might not be over just yet, with JPMorgan Chase & Co. forecasting Brent could break below $60 a barrel in the near term.
“Markets continue to ride the macroeconomic headwinds,” said Priyanka Sachdeva, an analyst at brokerage Phillip Nova Pte Ltd. in Singapore. “It’s ‘no news is good news’ for oil markets as the weekend didn’t see any new dents in banking’s foundations.”
Investors will be watching comments from several Federal Reserve officials and a key measure of US inflation this week for clues on the path forward for monetary policy amid the steepest tightening cycle in a generation.
In France, Exxon Mobil Corp. said it would begin shutting down its Gravenchon refinery — representing 20% of the country’s refinery capacity — on Saturday because of a lack of crude supply due to ongoing protests. That’s hit producers like Nigeria, with half of the nation’s April oil shipments still left unsold.

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