West Texas Intermediate was little changed after collapsing by 8% to the lowest close since late April as mounting angst about a slowdown spurred a sell-off in commodities including crude. Goldman Sachs said global consumption was running ahead of supply, and inventories were nearing critically low levels, although Citigroup Inc has warned prices could fall below $70 a barrel.
“While the odds of a recession are indeed rising, it is premature for the oil market to be succumbing to such concerns,” Goldman Sachs analysts including Damien Courvalin said in a note. “The global economy is still growing, with the rise in oil demand this year set to significantly outperform GDP growth.”
Still, in China there are signs of better oil consumption as the world’s biggest importer emerges from virus lockdowns that pummeled demand. Overall consumption of gasoline and diesel last month was at almost 90% of June 2019 levels, according to people with knowledge of the energy industry.WTI for August delivery edged up 0.5% to $99.77 a barrel on the New York Mercantile Exchange as of 5:49 a.m. in London.
Crude had been supported in recent weeks by interruptions to supplies including in Libya, as well as declines in key US inventories. In addition, there’s been evidence producers in the Organization of Petroleum Exporting Countries and allies have been unable to deliver supply increases in full.
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