Oil retreated as another weak sale of Treasuries raised concerns about rising yields, stoking a risk-off mood across financial markets.
West Texas Intermediate settled below $80 as equities declined. The drop pared Tuesday’s 2.7% gains, which were driven by renewed geopolitical risks, including ship attacks in the Red Sea and Israel’s advance into the Gazan city of Rafah.
US benchmark crude is up about 14% over the past 12 months because of tensions across the Middle East and output cuts by the Organization of the Petroleum Exporting Countries and its allies. Still, the conflict between Israel and Hamas has failed to disrupt flows, and supplies outside of OPEC+ have remained abundant, limiting the gains.
The producers’ group will hold an online meeting Sunday and is projected to extend its curbs into the second half of the year. The expectation has helped both WTI and Brent to break above their 100-day moving averages in recent days.
OPEC+ faces a darkening demand outlook in China as flagging factory strength and a housing crash reduce consumption of plastics and fuels used in construction. The Asian nation has also curbed some crude purchases from the de-facto leaders of the alliance — Saudi Arabia and Russia.
In the US, Federal Reserve Bank of Minneapolis President Neel Kashkari said the central bank’s policy stance is restrictive, but additional interest-rate hikes haven’t been ruled out. Fed policymakers are widely expected to keep rates at a 23-year high when they meet next month in Washington.
Prices:
- WTI for July delivery fell 0.8% to settle at $79.23 a barrel in New York
- Brent for July settlement declined 0.7% to $83.60 a barrel.
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