(Bloomberg) — Oil declined, paring a weekly gain, on a risk-off tone in wider financial markets and more signs of robust global supply.
Most Read from Bloomberg
Brent dropped toward $82 a barrel, on track to snap four days of gains, while West Texas Intermediate was near $78. The move lower came amid higher-than-usual volumes for both benchmarks, with some options contracts also traded, something that’s rare in early Asian hours.
Stocks in the region fell, putting downward pressure on risk assets such as oil. While there were signs that US inflation is cooling, Federal Reserve officials this week penciled in only one interest-rate cut this year.
“Market participants are reassessing if they have got ahead of themselves as weaker-than-expected US economic conditions were presented overnight amid the recent ‘hawkish hold’ from the Fed,” said Yeap Jun Rong, market strategist for IG Asia Pte in Singapore.
Oil has declined since early April, in part due to concerns over demand, although attacks on ships by the Yemen-based Houthi militants are starting to ramp up again. More supply from the US, as well as a gradual slowdown in Chinese refining activity, are further clouding the outlook.
The International Energy Agency this week flagged a major surplus this decade as the shift away from fossil fuels accelerates, a call that drew a rebuke from the Organization of the Petroleum Exporting Countries.
To get Bloomberg’s Energy Daily newsletter into your inbox, click here.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.
Read More: Oil’s Run of Gains Comes to Abrupt Halt on Risk-Off Sentiment