Oil Stabilizes But Earlier Gains Still Erased By Climate Of Fear
Meanwhile, Russia believes oil market are balanced: File Image/Pixabay
Thursday's oil trading, which played out as Russia deputy prime minister Alexander Novak described the market for the commodity as balanced, resulted in a stabilization of two key benchmarks after they dropped almost 4 percent in the previous session and incurred losses at the beginning of the week.
Brent eked out an 18 cent gain to $77.87 per barrel by 1344 GMT, while West Texas Intermediate rose 12 cents to $74.42.
In assessing market conditions, Novak told media that the Organization of Petroleum Exporting Countries (OPEC) saw no need for further output cuts but that the cartel can adjust policy if required.
Pavel Molchanov, analyst, Raymond James
There is a lack of conviction in either direction
He insisted that the market was balanced even though the recovery of oil demand in China following the lifting of pandemic lockdowns was "probably lower" than analysts had expected.
But for those inclined to bearish sentiment, there were still plenty of indications on Thursday that economies remained challenged: U.S. economic growth slowed by more than expected in the first quarter of this year, according to government estimates (although jobless claims fell in the week ending April 22).
Pavel Molchanov, an analyst at Raymond James, explained oil trading behaviour of late by remarking, "The current earnings season, as well as the macroeconomic reports in recent weeks, are sending mixed signals about recession risk.
"This is why oil prices are moving rather aimlessly: there is a lack of conviction in either direction."
As for trading behaviour moving forward, investors are waiting for U.S. Federal Reserve and European Central Bank interest rate decisions next week as an indication of economic health in general, in addition to monetary policy trajectory.