Oil futures: Crude rebounds as Citi's Morse calls market bottom
Quantum Commodity Intelligence - Crude oil futures Friday rebounded strongly as markets recovered from monthly lows registered this week, limiting weekly losses of around 1.5%.
Jul23 ICE Brent futures were trading at $80.28/b (1905 GMT), compared to the day's range of $77.51-80.48/b and Thursday's settle of $78.22/b.
At the same time, Jun23 NYMEX WTI was trading $76.71/b, versus Thursday's close of $74.76/b.
Ed Morse, global head of commodities research at Citi Group, and usually in the bearish camp, told CNBC Friday that oil markets had found support levels.
"We're close to what you might call a bottom based on fundamentals," said Morse, noting falling inventories and the additional OPEC+ cuts.
Despite rebounding from the lows, crude prices were trading close to levels prior to the 1.15 million bpd of OPEC+ cuts announced at the start of the month, as ongoing concerns over the US economy wiped out 1H-April gains, which came on the back of the announced reductions and optimism over growing demand from China.
"Crude prices are finding support after some mixed data continues to support the case for the Fed to remain in tightening mode. The crude demand outlook is all over the place given the economy is hitting stall speed, while airliners still remain optimistic for a busy summer travel period," said Ed Moya, senior market analyst at brokerage Oanda.
"Oil should find strong support ahead of the $70 region when you consider OPEC+ low production levels, the US will eventually have to refill the SPR, as Europe's growth forecast improves, and as China supports the real economy," added Moya.
The latest data from the US revealed the economy expanded by 1.1% annually in Q1 2023, which was lower than market expectations of closer to 1.9% and a significant slowdown from growth of 2.6% annualized in Q4 2022.
Consumption was up by 3.7% in Q1 but also missed expectations for a figure closer to 4% growth, while fixed investment dropped by 0.4%.
"The Q1 GDP data affirmed that an economic slowdown is underway but didn't flash overwhelmingly negative," said Edward Bell, Senior Director at NBD.
