Oil Holds Near Three-Month Low as Market Shows Signs of Weakness

By Bloomberg

May 24, 2024

image is BloomburgMedia_SDXKV3T0G1KW00_24-05-2024_06-05-03_638521056000000000.jpg

A gas flare burns from a pipe aboard an offshore oil platform in the Persian Gulf's Salman Oil Field, operated by the National Iranian Offshore Oil Co., near Lavan island, Iran, on Thursday, Jan. 5. 2017. Nov. 5 is the day when sweeping U.S. sanctions on Iran’s energy and banking sectors go back into effect after Trump’s decision in May to walk away from the six-nation deal with Iran that suspended them. Photographer: Ali Mohammadi/Bloomberg

(Bloomberg) -- Oil traded near lowest level in over three months as the market flashed signs of weakness ahead of the US summer driving season.

Brent crude was little changed near $81 a barrel, while West Texas Intermediate held below $77. Both benchmarks are set for a weekly loss. The Memorial Day weekend is typically seen as the start of the peak driving period in the US and investors will be watching to gauge the demand outlook.

Crude is still higher this year in part due to OPEC+ output cuts, but futures have eased since mid-April. The prompt spread for Brent was close to slipping into a bearish contango structure earlier this week, indicating ample supply, while money managers have trimmed their bets on rising prices.

The OPEC+ alliance meets on June 1 and is widely expected to prolong current output curbs into the second half of 2024. The group has been keeping roughly 2 million barrels a day offline this year.

“The upcoming OPEC+ meeting will dispel uncertainty on supply,” said Zhou Mi, an analyst at the Chaos Research Institute in Shanghai, adding that US demand is recovering and should get a boost from the summer travel season.

By Bloomberg News