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© Reuters.
By Barani Krishnan
Investing.com — Recession worries have started dominating markets of all shapes and sizes outside of oil, a day after OPEC+ announced a second production cut in four months. But longs in crude refused to settle for a negative close on Tuesday, pushing for a small gain that built on the mammoth 5% rally from the previous session.
New York-traded West Texas Intermediate, or WTI, crude settled at $80.71, up 29 cents, or 0.4%, after a session high of $81.78. On Monday, WTI jumped 6.3%. Since hitting 15-month lows of $64.12 on March 20, the U.S. crude benchmark has gained 25% — more than making up for the 13% weekly loss from three weeks ago.
Brent crude settled at $84.94, up just a penny, following an intraday high of $86.44. Brent gained about 6.5% on Monday.
Crude markets started the week explosively after a skillfully orchestrated production cut announcement by OPEC+ aimed at recapturing $80 pricing and above for a barrel.
Wall Street fell on Tuesday as evidence of a cooling economy exacerbated worries that the Federal Reserve’s campaign to rein in decades-high inflation may cause a deep downturn.
The three major U.S. stock indexes were lower at midday after data showed job openings in February dropping to the lowest level in nearly two years, suggesting that the labor market was cooling. Factory orders, meanwhile, fell for a second straight month, after data on Monday pointed to weakening manufacturing activity as well.
On the oil front, market participants were also on the lookout for weekly U.S. supply-demand data, due after market settlement from API, or the American Petroleum Institute.
The API will release at approximately 16:30 ET (20:30 GMT) a snapshot of closing balances on U.S. crude, gasoline, and distillates for the week ended March 31. The numbers serve as a precursor to official inventory data on the same due from the U.S. Energy Information Administration on Wednesday.
For last week, analysts tracked by Investing.com expect the EIA to report a crude stockpile drop of 2.329 million barrels, to add to the 7.489M barrel slump during the previous week to March 24.
On the gasoline inventory front, the consensus is for a draw of 1.729M barrels to add to the 2.904M barrel decline in the previous week. Automotive fuel gasoline is the No. 1 U.S. fuel product.
With distillate stockpiles, the expectation is for a drop of 0.396M barrels versus the prior week’s gain of 0.281M. Distillates, which are refined into heating oil, diesel for trucks, buses, trains, and ships, and fuel for jets, used to be the strongest demand component of the U.S. petroleum complex just months ago.
