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Crude oil futures fell for a fourth straight session Thursday to three-month lows, weighed by concerns about weakening demand and hawkish signals from the Federal Reserve.
Crude prices have drifted lower in recent days amid a muddled outlook for the commodity’s fundamentals, as a report this week showed inventories at the Cushing, Oklahoma, storage hub swelling to the highest in 10 months, but U.S. gasoline demand rose to its best levels since November ahead of the Memorial Day holiday weekend.
Economic news was no less confusing, as Wednesday’s Fed meeting minutes showed some members were willing to consider interest rate increases if inflation remains persistent, but a drop in weekly jobless claims pointed to a resilient economy.
“If the economic data fails to soften somewhat in an effort to tame inflation in coming weeks, look for rate increase chatter to increase, serving as a headwind for crude oil pricing,” Mizuho’s Robert Yawger said, according to Dow Jones.
Front-month Nymex crude (CL1:COM) for July delivery ended -0.9% to $76.87/bbl, its lowest settlement value since February 23, while front-month July Brent crude (CO1:COM) finished -0.6% to $81.36/bbl, its lowest close since February 7.
ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI)
Prices at the pump are ticking lower entering the Memorial Day weekend, with the average U.S. cost of regular gasoline falling to $3.58/gal last week from $3.67/gal about a month earlier, roughly in line with prices a year ago and ~5% below the typical pre-Memorial Day cost since 2000, when adjusting for inflation.
Gas stations monitored by AAA have seen lower or steady prices during the past month in all but six U.S. states, with some of the steepest cuts seen in Las Vegas, the Phoenix area and Sacramento, California.
“This summer is shaping up to be mostly favorable for drivers hitting the road,” GasBuddy’s Patrick De Haan told The Wall Street Journal.
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