Oil futures appeared to be unable to hold on to an early leap on Tuesday. That’s because of renewed pressure on market fears that there won’t be instant relief from the world’s oversupply.
On London’s ICE Futures exchange, April Brent crude oil dropped to $32.61 or 0.8%. Then, on the New York Mercantile Exchange, sweet, light crude oil futures for March delivery sagged 20 cents to $28.49 a barrel.
Initially, oil futures held gains right after the International Energy Agency issued a monthly market report, where it displayed its bearish market forecast that crude oil demand for this year will not surge more than 1.2%. It’s despite previous predictions from the International Monetary Fund, which global gross domestic product is going to soar by approximately 3.4% this year.
Additionally, some analysts told that the price action right after the IEA report revealed that investors were likely to factor in a lot of the bad news on crude oil. Indeed, many market participants are starting to feel more confident that American oil production will most likely fall soon, maybe close to the middle of the year.
Meanwhile, concerns regarding tightening storage for crude have exacerbated.