Oil prices hold near three-month lows, showing market weakness

Oil prices hovered near their lowest levels in over three months, reflecting market weakness as the US summer driving season approaches. Brent crude remained steady around $81 a barrel, while West Texas Intermediate stayed below $77, both poised for a weekly decline. As the Memorial Day weekend, marking the start of the peak driving period in the US, arrives, investors are closely monitoring demand trends.

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Despite a rise earlier this year, partly driven by OPEC+ production cuts, oil futures have declined since mid-April. The prompt spread for Brent almost entered a bearish contango structure earlier this week, signaling ample supply, while money managers have reduced their bets on rising prices.

The OPEC+ alliance, which has kept approximately 2 million barrels per day offline this year, is expected to extend current output cuts into the second half of 2024 at their June 1 meeting.