Aniket Pujari(Bloomberg) — Oil edged up as internal market metrics flashed signs that recent declines were overdone, overshadowing the prospect of a temporary truce in Ukraine.
West Texas Intermediate rose 0.3% to top $66 a barrel, recovering from the lowest closing price in six months. Ukraine said it’s ready to accept a US proposal for a 30-day truce in Russia’s war, raising expectations that Moscow’s crude may again flow freely in the near future.
Oil held its ground Tuesday even as fresh trade salvos from US President Donald Trump threatened to prolong a plunge in risk assets. Despite the weakening economic outlook weighing on futures prices in recent weeks, WTI’s prompt spread — a key indicator of near-term supply and demand balances — has held steady in a bullish, backwardated structure. That’s a sign that the growth scare for crude isn’t as severe as for other assets, said Jon Byrne, an analyst at Strategas Securities.
“Crude could be on the cusp of decoupling from other risk assets during this selloff,” Byrne said.
Also supporting crude prices, US Energy Secretary Chris Wright said on Monday that the Trump administration was prepared to enforce US sanctions on Iranian oil production, before clawing back gains.
Oil has fallen almost a fifth from a high in mid-January as Trump’s chaotic rollout of tariff hikes and push to slash federal spending darken the economic outlook in the biggest producer and consumer of crude. Other bearish factors include OPEC plans to add supply and weakening demand in China.
At a major industry conference in Houston, executives from some of the world’s top oil and gas producers — including Chevron Corp., Shell Plc and Saudi Aramco — offered full-throated support for President Trump’s energy-dominance agenda at the gathering.
“Given how light positioning is, it doesn’t take much to move the market,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group. “In my view, these are all noisy headlines that can fuel a short-term bounce, but the real economic data remains concerning, which will ultimately keep crude under pressure.”
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–With assistance from Yongchang Chin and Alex Longley.
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