Oil prices settled more than 1% lower last Friday, about 1.5% lower weekly, falling for the fourth consecutive week—the market balanced supply fears against renewed economic concerns in the United States and China.
US Michigan consumer sentiment fell sharply to a six-month low of 57.7 in May 2023 from 63.5 in April. Indicating the consumer and economic outlook worsened.
WTI slides as supply and economic fears intensify. A slowdown in demand dragged the prices down from the weekly high above $73. Now WTI is trying to hold the $70 level.
Oil prices, including the global benchmark Brent crude, are well below where they stood in early April after Saudi Arabia, Russia, and other members of the OPEC+ cartel said they would reduce output to stabilize the market.
OPEC kept its global oil demand forecast for 2023 unchanged last Thursday, expecting economic risks to be offset by higher Chinese demand growth.
Facing macroeconomic uncertainties, this week’s retail sales report from the US will be crucial to oil prices. Following two months of declines, it’s expected to report a 0.7% increase. It would ease the gloomy fear surrounding the oil markets if it bounced further than expected.
If WTI holds on to $70, it may stage a rebound and test $73 or higher. However, the uncertainties would still limit the upside range if recession fears triggered by weak US economic data should pay attention to $65 as the initial target.
