Oil’s rebound rally stalled in its third day as lagging fuel demand undercut a wave of algorithmic buying.

West Texas Intermediate edged lower to settle below US$73 a barrel amid slumping distillate futures. Demand for diesel, which is used as both an industrial and heating fuel, continues to languish at seven-year seasonal lows, a sign of lackluster economic activity.

“We are in a softer period seasonally and we have had a mild winter in the Northeast, so I am not surprised that there is weakness there,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. 

Earlier, oil rose above US$74 a barrel after a government report showed U.S. stockpiles fell more than 7 million barrels last week. Momentum-driven commodity trading advisors helped prop crude’s rebound rally as traders bought back into oil futures.

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Oil has been buttressed by supply risks and resurgent demand from China as the nation recovers from pandemic lockdowns. Uncertainty though continues to weigh on the market, following a banking crisis that has hit institutions in both the U.S. and Europe. 


  • WTI for May delivery declined 23 cents to settle at US$72.97 a barrel in New York.
  • Brent for May settlement fell by 37 cents to settle at US$78.28 a barrel.