Futures slid as much as 0.5 percent in New York, as investors across financial markets fled risky assets while Trump faces the biggest crisis of his presidency over a series of damaging revelations. That’s countering optimism after government data showed U.S. stockpiles dropped last week for a sixth straight weekly decline and crude production fell for the first time in 13 weeks, ending the longest stretch of gains since 2012.
Investors are rattled by the political uncertainty amid increasing concern over the health of the global economy. In the oil market, Russia and Saudi Arabia said this week they’re in favor of extending output curbs by the Organization of Petroleum Exporting Countries and its partners until March to shrink global stockpiles. Prices have slipped since reaching a 19-month closing high in February on speculation U.S. supply will undercut their efforts.
“Trump turmoil may take its toll on the oil market,” said Min Byungkyu, a global market strategist at Yuanta Securities Korea Co. in Seoul. “Although OPEC’s extension of production cuts should hold oil’s gain, the political risks we are seeing in the U.S. may discourage investments and that certainly won’t be a good sign for an oil rally.”
West Texas Intermediate for June delivery dropped as much as 25 cents to $48.82 a barrel and was at $48.92 on the New York Mercantile Exchange at 12:05 p.m. in Singapore. Prices gained 41 cents to settle at $49.07 on Wednesday, the highest level since April 28. Total volume traded was about 7.6 percent above the 100-day average.
Brent for July settlement fell 17 cents to $52.04 a barrel on the London-based ICE Futures Europe exchange. The contract gained 56 cents, or 1.1 percent, to close at $52.21 on Wednesday. The global benchmark crude traded at a $2.80 premium to July WTI.
U.S. crude stockpiles fell 1.75 million to 520.8 million barrels last week, down from a record 535.5 million at the end of March, according to the Energy Information Administration. The nation’s oil production dropped to 9.3 million barrels a day, EIA data released Wednesday shows.
- Venezuela, the oil-rich Latin American nation that signed up to OPEC’s supply cuts, has reduced production more than any other member in the past year. And it’s not even trying.
- Iraq is on track for what may be the country’s highest monthly crude exports even as the Middle East nation supports moves to extend OPEC-led production cuts aimed at trimming bloated global inventories.