West Texas Intermediate advanced 2% in a move traders characterized as a technical correction following crude’s descent into oversold territory. The jump came even as US oil inventories rose 8.85 million barrels last week and one measure of gasoline demand plunged below seasonal 2020 levels.

“Crude is trying to bounce off the lowest levels since March as the last two weeks’ selloff in prices stemmed from a perceived slowdown in both Asia and Europe with expectations that demand destruction is coming,” said Dennis Kissler, senior vice president of trading at BOK Financial.

Crude’s tumble in recent days has seen it break out of the trading range it’s been in for much of the summer. Futures have been trading below key moving averages and forming bearish technical patterns that compounded the recent sell-off. Monetary tightening and concerns about an economic slowdown have also weighed on the market.

“The rising US dollar to multi-year highs has been a big bearish factor to crude and with the Fed set to raise interest rates again, the strength looks to continue,” said Kissler. That along with China locking back down has “spooked” the energy sector.

Meanwhile, the Biden administration is weighing the possibilty of another release from the Strategic Petroleum Reserve to stave off an oil-price spike when EU sanctions on Russian supplies take effect this winter.

Still, the WTI prompt timespread, an indicator of market tightness, widened Thursday after oil inventories at the Cushing, Oklahoma, storage hub declined for a second week. In another bullish signal, the Energy Information Administration raised its outlook for global oil demand Wednesday, while also cutting the forecast for US supply.

Office: 479-846-2761

Cell: 479-790-5581

Tell Us How We’re Doing On Google Business

 https://g.page/r/CUyL9wDolv04EAI/review

As always, thank you so much for being a part of the Fuel Manager Services, Inc. family, and we look forward to making this the best year yet!

Brent crude dropped 3.04% to settle at $92.83 a barrel Tuesday. West Texas Intermediate was little changed at $86.88 compared to its Friday settlement; markets in New York didn’t register a closing price on Monday due to the US holiday. Saudi Arabia cut oil prices for customers in Asia from a record as Covid-19 restrictions and sagging economies cool energy demand in the region. Virus-related lockdowns in China spread, reigniting fears of a global slowdown. “Energy traders appear to be skeptical of any rallies as they digest a plethora of global economic challenges, a wrath of uncertainty to supplies, and looming crude demand destruction fears,” said Ed Moya, senior market analyst at Oanda.

On Monday, WTI rallied over $90 a barrel as the Organization of Petroleum Exporting Countries and allies including Russia agreed to shave a modest 100,000 barrels a day off production.

Oil’s drop in the summer months is the latest chapter of a tumultuous year, with prices driven higher in the first half by Russia’s invasion of Ukraine, then undermined as central banks shifted tack and Moscow managed to keep most exports flowing. Crude’s recent slump prompted OPEC+ to cust its productions for the first time in more than a year, a sign the production group is serious about managing global markets. “Fundamentally we’re probably moving in the right direction in terms of calming the oil market, but all of that friction out there related to Russia seems like it’s only going in one direction,” Jeff Brown, president of consultant FGE, said in a Bloomberg TV Interview. “OPEC is essentially signaling that we don’t like $90 a barrel. They’re pretty much at production limits, so let’s defend a high price.”

The group’s move “signals a willingness to resume active market management to avert a major sell-off due to recession concerns or expectations of policy-driven supply increases,” RBC Capital Markets LLC analysts including Helima Croft said in a note. “They are seeking to put short-sellers on notice that they will not easily surrender the recent gains and go gently into the night.”

Oil traders are also wrestling with the growing energy crisis in Europe. Governments are patching together emergency measures to support utilities amid concerns that companies will buckle under the weight of growing margin calls.

West Texas Intermediate futures dropped 3.3% to settle at $86.61 a barrel on Thursday. Investors are focusing on tightening monetary policy around the world that could crimp economic growth and hit oil demand. The lockdown of the Chinese megacity of Chengdu to contain a Covid-19 outbreak added to the negative sentiment.

“The oil benchmarks have started September lower as signs that the global economy is heading towards murky waters grow ever-more apparent,” said Harry Altham, an energy analyst for StoneX Group. “There has been a wider shift away from risk assets in recent days and this has accelerated as bets are on” for a 75-basis-point rise in US interest rates next month.

Oil declined by more than 20% in the three months through August, overturning all of the gains since Russia’s invasion of Ukraine at the end of February. The slump prompted Saudi Arabia to signal that the Organization of Petroleum Exporting Countries and its allies could cut supplies. The group is scheduled to gather on Monday to discuss output policy.

“What it could translate into is OPEC potentially once again cutting production if prices get too low,” said Ole Hansen, Saxo Bank’s head of commodity strategy. “That makes me believe that the downside is limited ahead of Monday’s meeting.”

Among the items that OPEC+ ministers may weigh up is a US-led plan to cap the price of Russian crude in a bid to deprive Moscow of funds amid the war in Ukraine. The proposal has been gathering support, with the UK government signaling its approval. Group of Seven finance ministers including US Treasury Secretary Janet Yellen are due to discuss the proposal on Friday.

Strength in the greenback has added to headwinds for dollar-denominated commodities as the pricier currency makes them more expensive for overseas buyers. The Bloomberg Dollar Index rose toward the highest level on record following a run of three monthly gains.

Iran, meanwhile, said negotiations with the US over a European Union proposal to revive a nuclear deal will drag on into September, undercutting speculation that increased oil flows are imminent. “The one trade that everyone can agree upon is that the oil market will likely remain tight,” said Ed Moya, senior market analyst at Oanda.

Crude is on course for a third straight monthly drop on concern global growth will slow as central banks tighten policy aggressively, hurting consumption. To counter that weakness, Saudi Arabia raised the possibility last week that the Organization of Petroleum Exporting Countries and its allies could cut output. The group will meet Sept. 5 to consider October production and review the outlook for the rest of the year. Separately, loadings from an export terminal for Kazakhstan crude have seen interruptions.

Cries of supply shortages continue to come from all corners, with Shell Plc’s Chief Executive Officer Ben Van Beurden telling a conference in Norway that it’s a “fantast” that the global energy crunch will be easy to rectify. Speaking at the same event, Tesla Inc. CEO Elon Musk said the world needs more oil and gas now while also pushing to transition to renewable supplies.

Meanwhile, the EU is planning a emergency intervention to dampen the spike in power prices. As natural gas prices rally and trade five times higher than crude futures, it will be giving strong incentives for energy switching, said Francisco Blanch, head of global commodities and derivatives research at Bank of America Corp. in a note to clients.

In a bullish note on commodities, Goldman Sachs Group Inc. said that crude oil had scope to push higher, especially amid shortages of other energy raw materials including natural gas.