Oil prices remain steady as investors weigh supply outlook
By William Watts and Isabel Wang
U.S. crude nears bullish 'golden cross' on charts
Oil futures were little changed on Tuesday, consolidating after bumping higher in the previous session on worries over the global supply outlook.
Price moves
West Texas Intermediate crude CL00 for May delivery CL.1 CLK24 fell 33 cents, or 0.4%, to end at $81.62 a barrel on the New York Mercantile Exchange.Brent crude BRNK24, the global benchmark, was off 50 cents, or 0.6%, to settle at $86.25 a barrel on ICE Futures Europe. June Brent BRN00 BRNM24, the most actively traded contract, was off 45 cents, or 0.5%, ending at $85.63 a barrel. April gasoline RBJ24 lost 4 cents, or 1.7%, to end at $2.7006 a gallon. It was the largest one-day dollar and percentage decline for the contract since March 5, according to Dow Jones Market Data. April heating oil HOJ24 was off 5 cents, or 2.1%, to settle at $2.6218 a gallon.Natural gas for April delivery GWMJ24 lost 4 cents, or 2.5%, ending at $1.5750 per million British thermal units.
Market drivers
Oil futures settled modestly lower on Tuesday after snapping a three-day losing streak in the previous session, buoyed by continued attacks by Ukraine on Russian refineries.
On Monday, Moscow ordered companies to rein in oil output in the second quarter to ensure they meet a production target of 9 million barrels per day by the end of June, in line with its pledges to OPEC+, according to Reuters.
Moscow's commitment to production cuts comes as India, which together with China has recently been the most important buyer of Russian oil, is seen having difficulties continuing to purchase large quantities from Russia due to a tightening of U.S. sanctions against the Russian tanker fleet, Barbara Lambrecht, commodity strategist at Commerzbank, said in a note.
Meanwhile, Indian refiners appear to have stopped buying Venezuelan crude with a U.S. waiver on sanctions against Caracas due to expire on April 18, Bloomberg reported on Monday.
India, the world's third largest oil importer and consumer, in December have ramped up imports of cheap Venezuelan oil for the first time since 2020, after the U.S. imposed temporary relief was agreed from October 2023 to April 2024.
As a result, India has been tapping markets where Western countries are also buying, Lambrecht said.
Citing tanker data, Lambrecht said 7.6 million barrels of American crude are expected to land in India next month, the most in more than a year. "Things are getting tighter - no wonder prices are well supported," she wrote on Tuesday.
Meanwhile, speculative long interest in crude may be supported as WTI futures approach a so-called golden cross, analysts said. This occurs when the 50-day moving average, viewed as a proxy for an asset's short-term trend, moves above the 200-day moving average, a proxy for the long-term trend.
MarketWatch Live: Golden cross for crude may fire up energy sector
-William Watts -Isabel Wang
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03-26-24 1513ET
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