(Bloomberg) — Oil was poised to eke out a modest weekly gain as futures remained in a narrow range, with the outlook for supply and inflation in focus.
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Brent traded above $83 a barrel after a two-day advance that saw futures add about 1%, while West Texas Intermediate was near $79. Lower US crude stockpiles, as well as a lift from signs that US inflation could be ebbing, have vied in recent sessions with outlooks for weaker demand growth from groups including the International Energy Agency.
Price action this week has been muted, as the competing drivers largely offset each other. That’s resulted in the tightest weekly range — of less than $3 a barrel for Brent — since March. Technical factors are also at play, with prices holding close to the 100-day moving average.
Oil has had few clear drivers this week, with the “market backdrop currently a crossword puzzle of mismatched demand and supply forecasts” from bodies like OPEC and the IEA, said Priyanka Sachdeva, senior market analyst for brokerage Phillip Nova Pte. Also softer US inflation prints haven’t “eased the ambiguity over pace and timeline of the Fed’s rate-cut trajectory.”
Crude remains higher for the year to date, although futures have declined since April as the geopolitical risk premium that had come from tensions in the Middle East faded. An OPEC+ meeting on June 1 is widely expected to see the group agree to continue with existing production cuts, with some members seeking to have their acknowledged capacity levels upgraded.
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