WTI, Brent bounced back after selling

Prices were positive in morning trade on Wednesday but turned negative later in the session after data showed a rise in US crude inventories.

The sell-off is overblown, said Warren Patterson, head of commodity strategy at ING. OPEC+ won’t start raising production until October, and the global oil balance will tighten beforehand, Patterson said.

Here are today’s energy prices:

• West Texas Intermediate July contract: $73.08 a barrel, down 13 cents, or 0.18%. Year to date, US crude is up 2.1%.
• August Brent contract: $77.44 a barrel, down 6 cents or 0.08%. Year to date, the global benchmark is up 0.6%.
• July RBOB gasoline contract: $2.33 per gallon, down 0.44%. Year to date, gasoline futures are up 11.2%.
• July natural gas contract: $2.70 per thousand cubic feet, up 4.76%. Year to date, natural gas is up 7.7%.

“Technicals also suggest that the oil market is entering oversold territory,” Patterson told clients in a research note on Wednesday.

Rising US oil inventories also weighed on prices on Wednesday. U.S. crude oil inventories rose by 1.2 million barrels last week, according to data from the Energy Information Administration. That far exceeded analysts’ expectations for a drawdown of 2.3 million barrels. Gasoline inventories rose by 2 million barrels, which was largely in line with expectations.

U.S. crude “has a history of giving up pretty quickly from oversold territory compared to camping in the basement for days,” Bob Yawger, executive director of energy futures at Mizuho Securities, told clients in a note on Tuesday.

Yawger said U.S. oil could return to a range of $76.15 to $80.62 a barrel in the coming days as speculators cover short positions before the market “reverses and goes lower again.” .

Helima Croft, head of global commodities strategy at RBC Capital Markets, stressed that OPEC+’s plan to increase oil supply is not binding. Saudi Arabia will “push” for an output increase in the fourth quarter if the market is oversupplied or sentiment is weak in September, she said.

“The intention has always been to slow down the barreling back and not send the market into a decline with an increase in supply,” Croft told clients in a research note on Tuesday. “Since Saudi Arabia will provide the bulk of the new barrels, they will not be tied to the Sunday supply schedule unless it is in their national interest,” she said.