WTI falls back below $83 a barrel

U.S. crude oil remained below $83 a barrel on Wednesday, falling slightly after rebounding nearly 2% in the previous session.

Traders’ attention has shifted back to the fundamentals of supply and demand as the threat of war between Israel and Iran has faded.

The market appears somewhat bearish at the moment, with global oil inventories rising as crude oil that had been stuck on the water in part due to Red Sea disruptions is being unloaded, according to a note from Goldman Sachs on Tuesday. According to the bank, this reduces market tensions.

Goldman also estimates that the geopolitical risk premium will factor into prices falling by an additional $5 to $10 per barrel in the coming months.

Here are the latest energy prices:

• West Texas Intermediate June contract: $82.60 a barrel, down 78 cents, or 0.94%. Since the start of the year, US crude oil is up more than 15%.
• Brent June contract: $87.77 a barrel, down 65 cents, or 0.74%. Year to date, the global benchmark is up about 14%.
• RBOB Gasoline May contract: $2.71 per gallon, down 0.24%. Year to date, gasoline futures are up more than 29%.
• Natural gas May contract: $1.70 per thousand cubic feet, down 5.91%. Year to date, natural gas is down about 32%.

U.S. commercial crude inventories, which exclude strategic oil reserves, fell by 6.4 million barrels last week, the biggest drop since mid-January, according to Energy Information Administration data.

And President Joe Biden signed a foreign aid package Wednesday that would expand sanctions on Iranian oil by targeting ports, ships and refineries that knowingly accept crude exports from the Islamic Republic.

Under the legislation, Biden can lift sanctions for national security reasons, likely limiting their impact on the oil market.

“We maintain our view that the Biden administration does not intend to strictly enforce sanctions that could drive up global crude prices (and, therefore, US retail gasoline prices). United States) during an election year,” geopolitical risk management service Rapidan Energy told clients. a note before the legislation is adopted.

A prolonged rally above $95 a barrel for Brent, the global benchmark, is unlikely at the moment, said Tamas Varga, an analyst at oil broker PVM.

The flow of oil from the Middle East has not been interrupted by the conflict, production is increasing in the United States, inflation remains stubborn and OPEC has sufficient reserve capacity to return to the market in the event of a supply crisis, Varga said.

“It is fair to conclude that the last two on the list played the most significant role in the drop in the price of Brent from $92 per barrel less than two weeks ago to less than $86 per barrel on Monday,” he said. the analyst told his clients in a note. Wednesday.