Commodity Blog

Crude oil declined today as macroeconomic data in the United States was bad. Purchasing Managers’ Indices released by both Markit and Institute for Supply Management showed slowing expansion of the services sector. The data followed yesterday’s report about decline of factory orders. Signs of slowing economic activity are usually detrimental to growth-linked commodities like crude oil.

Losses were capped by supportive fundamentals, including the OPEC+ supply cuts and political unrest in Venezuela. The United States announced sanctions against state-owned oil firm Petróleos de Venezuela SA last month, and the European Union is likely to join the sanctions after most European countries recognized opposition leader Juan Guaidó, who declared himself president of Venezuela, as the interim leader of the country. Market analysts are worried, though, that the crisis in the South American country may stop supporting prices for crude as the news is priced in now.

Contract for delivery of WTI crude oil in March declined 1.3% to $53.85 per barrel as of 17:46 GMT on NYMEX today. April futures for Brent crude fell 0.69% to $62.08 per barrel on ICE.

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