U.S. West Texas Intermediate crude oil futures are set to close lower for the week as demand concerns continue to outweigh rising geopolitical tensions in the Middle East. Furthermore, the OPEC-led supply cuts remain in place and the cartel and its allies are close to approving an extension of this move to offset production, trim the excess global supply and stabilize prices. However, this news has not been able to stop the selling pressure or shift the bearish investor sentiment.
Government trading data confirms this assessment with the Commodity Futures Trading Commission (CFTC) showing hedge fund managers continued to liquidate long positions at the fastest rate since the fourth quarter of 2018 due to rapidly increasing fears about a global economic slowdown.
Although there was a spike to the upside in reaction to the attacks on two tankers in the Strait of Oman, the trade this week was mostly dominated by worries over rising U.S. stockpiles and lower global demand.
Prices Pressured Wednesday by Bearish Government Report
A bearish U.S. government report drove price sharply lower on Wednesday.
The U.S. Energy Information Administration (EIA) on Wednesday reported crude stockpiles rose unexpectedly for a second week in a row, climbing 2.2 million barrels the week ending June 7. Traders were looking for a drawdown of about 481,000 barrels.
U.S. stockpiles now stand at 485.5 million barrels, the highest level since July 2017. This is 8% above…