WTI crude oil gained 1.53% to settle at $71.11 per barrel in today’s session. This can be attributed to a tightening physical market as OPEC’s production cuts officially took place at the start of May. Indeed, output has been reduced by over one million barrels per day.
Nevertheless, oil is still down on the year as investors weigh the impact of higher interest rates and a slowing Chinese economy. It also doesn’t help that negotiations over the debt ceiling have yet to be resolved, stirring fears of a U.S. debt default.
Furthermore, Saxo Bank pointed out that industrial demand appears to be weakening as well. The firm’s analysts pointed to low refining margins on diesel and gasoline as a potential indicator.
In addition, the price of natural gas jumped 4.81% to close at $2.375 per MMBtu. This follows Friday’s Baker Hughes rig count survey, which indicated that drilling dropped significantly as the natural gas market remains oversupplied.
As a result, the United States Oil Fund ETF (USO) is also up 1.47% today. However, it’s still down almost 2.5% over the past five days. Here is a list of energy stocks that can be influenced by the latest developments in the energy markets.
