Views:0 Author:Site Editor Publish Time: 2021-05-26 Origin:Site
Oil slumped the most in over a month alongside a commodities downturn as growing inflation concerns raise the specter of a less accommodative U.S. Federal Reserve.
West Texas Intermediate futures fell 3.4% on Thursday to the lowest since the end of April. Prices paid to U.S. producers rose in April by more than forecast, adding to signs of rising inflationary pressures that have gripped broader markets recently. Elsewhere, China’s Premier Li Keqiang urged the country to deal effectively with the commodity price surge and its impact, according to a state television report, echoing previous comments from officials.
The latest data “are cementing the view we’re going to have markets that are just fixated on inflation,” said Edward Moya, senior market analyst at Oanda Corp. “All these pricing pressures are ramping up those rate-increase bets. For crude, we’re trying to get a sense of what the path of the dollar’s going to be, and that’s uncertain.”
Meanwhile, the Colonial Pipeline -- a key source of gasoline for the East Coast -- is returning to service after a cyberattack last week, adding on Thursday that each of its markets should receive product from its system by mid-day. Still, the pipeline remains running at less than half of its capacity, according to people familiar with the matter.
Still, there were some glimmers of hope for the oil market. India’s largest oil refiner is shopping for crude again after a one-month hiatus, providing some optimism that the South Asian country’s demand hasn’t been stalled by a rampant virus resurgence. Indian Oil Corp. issued three tenders to buy crude for loading in the next two months. Going forward, the bullishness of the company’s move will depend on how much it actually ends up purchasing.
WTI for June delivery fell $2.26 to settle at $63.82 a barrel
Brent for July settlement shed $2.27 to end the session at $67.05 a barrel
While the Colonial Pipeline has restarted, fuel shortages are still lingering. The Biden Administration has temporarily eased a U.S. shipping requirement so a single foreign tanker could transport gasoline and jet fuel to the East Coast. A White House official said that the Jones Act waiver was applied to one tanker, but other requests are under consideration.
Further resumption of flows on the pipeline will bring relief to motorists after panic-buying emptied out some gas stations and retail prices topped $3 a gallon. In futures markets, the spread between crude and gasoline slumped toward $24 a barrel after topping as much as $27 a barrel earlier this week.