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.
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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.
