Brent oil is on course for its longest run of quarterly losses in data going back more than three decades as persistent concerns over the demand outlook and robust supplies weigh on prices.
Futures in London edged above $75 a barrel Friday but were down for a fourth quarter. West Texas Intermediate was heading for its first back-to-back decline since 2019. The market has faced a raft of headwinds, from aggressive rate hikes to China’s sluggish recovery and resilient supply from Russia and Iran.
That’s all fed into bearish sentiment, which has overwhelmed any optimism around supply cuts by Saudi Arabia or a potential pickup in summer demand.
The outlook for the second half is mixed. There’s some speculation that the market will tighten, in part due to the end of seasonal maintenance. Yet US Federal Reserve Chair Jerome Powell and some of his peers have said more interest-rate increases are likely, which would drag on energy consumption.
“We fear that market apathy and lack of risk-deployment will compound further if the global physical market does not tighten,” RBC Capital Markets LLC analysts Michael Tran and Helima Croft wrote in a note. “This could end up being a lost year for the oil market as risk remains on the sidelines.”
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