Oil held near its lowest level in almost three months on persistent concerns over the demand outlook in China and the US.

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West Texas Intermediate futures steadied above $67 a barrel, after losing more than 7 percent over the previous three sessions, while global benchmark Brent hovered near its lowest close since December 2021. Chinese trade data indicate a weak economic recovery, while international flights from Northeast Asia are still far below pre-pandemic levels, highlighting the lackluster recovery in the world’s biggest crude importer.

A slowing US economy and resilient Russian exports are adding to the downward pressure, canceling out Saudi Arabia’s recent decision to cut 1 million barrels a day of production. Goldman Sachs Group Inc. lowered its oil price forecasts for the third time in six months on Sunday, saying it sees supplies swelling and demand waning.

Widely watched timespreads are also signaling ample supply in the market. Spreads for WTI have been narrowing recently, while the prompt spread for Brent — the gap between the two nearest contracts — was briefly at parity on Monday.

Still, there are signs of fresh physical demand, with US sour crude prices at their strongest in a year following the nation’s pledge to refill its strategic reserves. Also, moderating US inflation is set to support the Federal Reserve’s efforts to pause interest-rate hikes this week, which could buoy demand.

First Published:Jun 13, 2023 7:16 AM IST