Oil futures fell lower on Tuesday, poised to post its first session loss of the month, as prices appeared to halt a multi-session winning streak and retreated from their highest levels in more than a year. “After losing momentum for much of January trading, the crude complex has posted a strong rally in the last two weeks,” pushing Brent above the $ 60-a-barrel level, said Robbie Fraser, analysis manager. and Schneider Electric Global Research, on a daily note.
“That rally has been aided by longer-term optimism and expectations of greater market strength, but current prices are likely to generate some anxiety that the rally is close to overextended territory,” he said. Benchmark U.S. West Texas Intermediate crude for March delivery CL.1, -0.36% CLH21, -0.36% was down 29 cents, or 0.5%, to $ 57.68 a barrel on the New York Mercantile Exchange after six consecutive earning sessions. April Brent crude BRN00, -0.10% BRNJ21, -0.10% lost 8 cents, or 0.1%, to $ 60.48 a barrel on ICE Futures Europe after trading above $ 60 on Monday. for the first time since January 24, 2020. Oil rallied on Monday as stocks continued their rise, helping lift major US benchmarks to another round of record highs. Widespread market optimism remains tied to expectations for another big round of government aid under President Joe Biden‘s $ 1.9 trillion proposal, as well as progress in launching vaccines around the world. Meanwhile, Saudi Arabia’s decision to unilaterally cut production by 1 million barrels a day in February and March is seen to help keep supplies under control, analysts said. However, trade restrictions related to COVID-19 are likely to remain a risk until there is a clear increase in global vaccination rates, Warren Patterson, head of commodity strategy at ING, said in a note. Also, price levels have risen to levels that seem increasingly attractive to producers, which could lead to a rebound in production that should provide some price resistance, Patterson said, noting that the US has seen a steady increase in the shale oil rig count. since the end of November. Schneider Electric‘s Fraser said crude prices in the $ 55- $ 60 range have been “historically enough to trigger new production activity in parts of America’s major shale basins.” “While the current supply / demand balance is skewing toward undersupply, global stocks of crude and products remain high, and any pickup in US supply could further prolong a full recovery,” Fraser said. The Energy Information Administration will release its monthly Short-Term Energy Outlook report later on Tuesday, which includes projections for US oil production.Meanwhile, the outlook for an eventual return in Iranian exports and the Termination of the record deal between the Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC +, “offers additional downside price risk,” Fraser said. Still, “the recent setbacks in the recovery of Libya’s exports serve as a reminder that geopolitical risk continues to challenge production in several key regions.” Back on Nymex, prices for petroleum products were down as well, with RBH gasoline for March 21, -0.85% down 1.1% at $ 1.6564 a gallon and heating oil HOH for March 21, – 0.14% losing 0.4% to $ 1.7411 a gallon. March natural gas NGH21, -2.91% lost 2.5% to $ 2.81 per million British thermal units. Weekly data on US oil supplies will be released by the American Petroleum Institute Tuesday night, followed by the Energy Information Administration early Wednesday. On average, domestic crude supplies for the week ending February 5 are expected to decline by 2.7 million barrels, according to an analyst survey by S&P Global Platts. The survey also shows expectations for a 2.7 million barrel increase in gasoline reserves and a 1.7 million barrel drop for distillate inventories.