Oil prices fell in early trending on Monday as worries about fuel consumption in the world’s two largest oil consumers, the United States and China, outweighed optimism about tightening supplies from potential OPEC+ cuts and a restart of U.S. buying for reserves.
Brent crude futures fell 59 cents, or 0.80%, to $73.58 a barrel by 11.01 A.M. Bangkok time, while U.S. West Texas Intermediate crude was at $69.50 a barrel, down 54 cents, or 0.77%.
Due to worries that the U.S. could fall into a recession on “significant risk” of a historic default within the first two weeks of June, both benchmarks dropped for a fourth consecutive week last week, the longest string of weekly drops since September 2022, according to Reuters.
Market views of crude oil will remain lackluster at best, according to IG analyst Tony Sycamore, given the uneven re-opening in China and worries that the U.S. is experiencing a growth slowdown at a time when the X-date for the debt ceiling is swiftly approaching.
Despite this, sour crude supply may decrease and cause global crude supplies to tighten in the second half as a result of increased output cutbacks by OPEC+, the Organization of the Petroleum Exporting Countries and their allies, including Russia.
Energy Secretary Jennifer Granholm told lawmakers on Thursday that after the United States completes a congressionally mandated sale in June, it could begin repurchasing oil for the Strategic Petroleum Reserve (SPR).
