Brent crude fell below $73 a barrel as traders bet on easing Middle East supply disruptions. The move extends a week-long slide driven by demand concerns and a stronger dollar.
Alpha Score of 36 reflects weak overall profile with poor momentum, poor value, moderate quality, strong sentiment.
Brent crude fell below $73 a barrel on Thursday, extending a week-long slide. Traders priced in a recovery in Middle East supplies, market participants said. The benchmark settled at $72.85, down 1.8% on the session. West Texas Intermediate crude lost 2.1% to trade near $68.50.
The decline accelerated after reports that supply disruptions in the region could ease. Traders cited progress in ceasefire talks between Israel and Hamas, as well as signals from Libya that its oil fields could resume production after a political dispute. The move followed a 3% drop on Wednesday after OPEC+ signaled it may proceed with a planned output increase from October, according to delegates. The cartel's decision to unwind some production cuts has weighed on prices for weeks.
Demand concerns also lingered. Data from China showed refinery runs fell for a third straight month. U.S. gasoline demand slipped below seasonal averages. A stronger dollar added pressure, making dollar-denominated commodities more expensive for holders of other currencies.
The supply recovery narrative is the dominant driver right now, a trader at a European bank said. The market is looking past near-term disruptions and focusing on the potential for more barrels later this year.
On the demand side, the outlook remains cloudy. The International Energy Agency last week cut its 2024 demand growth forecast, citing weak Chinese consumption. U.S. gasoline demand has been below year-ago levels for most of the summer driving season.
Speculators have turned increasingly bearish. Hedge funds and other money managers cut their net long positions in Brent and WTI by the most in four months during the week ended Aug. 20, according to ICE and CFTC data. That suggests the market is already positioned for further downside.
Brent's break below $73 opens the door to a test of $70, a level not seen since June, traders said. The next catalyst is the weekly U.S. inventory report due later Thursday. Analysts surveyed by Reuters expect a draw of 2.2 million barrels in crude stocks, which could provide temporary support. The broader trend remains bearish as long as OPEC+ sticks to its unwinding plan, traders said.
The Organization of Petroleum Exporting Countries and its allies are scheduled to meet in early October to review output policy.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.