Oil Recoups Last Week’s Losses as Traders Buy the Dip

(Bloomberg) -- Oil rose 3% to settle near $78 a barrel, recouping losses from last week’s selloff as traders piled back into the commodity.

Most Read from Bloomberg

• Russia Is Sending Young Africans to Die in Its War Against Ukraine

• Musk to Ban Apple Devices If OpenAI Is Integrated Into OS

• NYC Landlord to Sell Office Building at Roughly 67% Discount

• Investment Bank Moelis Probes Incident After Video of Employee Appearing to Punch Woman

• Apple Unveils ‘AI for the Rest of Us’ in Bid to Retake Spotlight

US crude followed broader markets higher. News of additional sanctions on Iran’s shipping sector also supported prices, which last week slumped to a four-month low after OPEC and its allies left the door open to restoring some output later this year. Officials have since clarified that they could pause or reverse production changes if necessary.

“Today’s recovery comes on the back of a three-week drop” driven by OPEC+’s recent decision, Fawad Razaqzada, a market analyst at City Index and Forex.com, wrote in a note Monday. “At the start of this week, traders have decided to buy the dip. With the US driving season underway, demand is likely to recover, keeping the downside limited – for now.”

Investors are now awaiting monthly oil reports from the US government, International Energy Agency, and OPEC+ due Tuesday and Wednesday, that will shed light on the outlook for the rest of the year. The Federal Reserve also releases its decision on interest rates on Wednesday.

Crude has dropped since early April on a weakening physical market and fading geopolitical risk premium. After OPEC+’s announcement of a potential rollback in cuts, net-bullish bets for the global benchmark fell by the most on record.

Elsewhere, Iraq said it expects to soon reach a final agreement with the semi-autonomous region of Kurdistan and international oil companies there to restart oil exports that have been disrupted for more than a year.

To get Bloomberg’s Energy Daily newsletter into your inbox, click here.

Most Read from Bloomberg Businessweek

• As Banking Moves Online, Branch Design Takes Cues From Starbucks

• Legacy Airlines Are Thriving With Ultracheap Fares, Crushing Budget Carriers

• Sam Altman Was Bending the World to His Will Long Before OpenAI

• Is There Room for Common Ground on Congestion Pricing?

• David Sacks Tried the 2024 Alternatives. Now He’s All-In on Trump

©2024 Bloomberg L.P.