Oil Stumbles as Putin Clouds Outlook for More Production Curbs

(Bloomberg) -- Oil fell by the most in more than two weeks as Russian President Vladimir Putin clouded the outlook for production cuts that have helped power this year’s rally.

Brent crude futures slipped 0.7 percent on Tuesday, after gaining the previous three days amid rising tension in Libya. Putin, at a St. Petersburg forum, said Russia is comfortable with current prices and not yet ready to say whether it wants to extend output curbs it orchestrated with OPEC. Meanwhile, the industry-funded American Petroleum Institute was said to report U.S. crude stockpiles rose by 4.09 million barrels last week.

The International Monetary Fund, meanwhile, cut its forecast for global growth to the lowest since the financial crisis, reviving worries about oil demand. West Texas Intermediate crude also fell, with technical-trading indicators suggesting its 41 percent climb this year has pushed it into overbought territory.

Investors have “reasonable excuses" to break their stride and take profits, said Kyle Cooper, a consultant at Ion Energy Group in Houston. “The market’s taking a little bit of a pause after what’s still been a very, very substantial rally."

Brent, the global benchmark, has gained more than 30 percent this year as the Organization of Petroleum Exporting Countries restricted production with Russia and other partners. Tensions in Libya, Iran and Venezuela have added momentum, along with enough optimistic data about the economy to mute fears about a slowdown.

Brent for June settlement fell 49 cents to $70.61 a barrel on the London-based ICE Futures Europe exchange at the close of trading. The global benchmark crude was at a premium of $6.65 to WTI for the same month.

WTI for May delivery traded at $64.14 a barrel at 4:40 p.m. after settling at $63.98 a barrel on the New York Mercantile Exchange, a day after posting its highest close since Oct. 31. The grade’s 14-day relative strength index rose as high as 77 on Tuesday, above the 70 level that signals it’s overbought.

Crude has rallied in recent days on potential disruption in Libya, although the latest fighting has been far from key oil installations. Previous bouts of violence have had a serious impact on the country’s ability to ship crude.

The API was also said to report U.S. gasoline inventories fell 7.08 million barrels, distillate supplies slipped 2.4 million barrels and Cushing, Oklahoma, stockpiles fell 1.28 million barrels. The gasoline draw would be the largest since September 2017 if Energy Information Administration data confirms it on Wednesday.

©2019 Bloomberg L.P.