Oil steadies as signs of inventory draws vie with slowdown fears
Oil was steady as investors weighed signs of shrinking US crude stockpiles against concerns over an uneven demand recovery and the prospect of further monetary tightening.
West Texas Intermediate traded near $81 a barrel after closing little changed on Tuesday. The American Petroleum Institute reported crude inventories at the storage hub at Cushing, Oklahoma, dropped again last week, according to people familiar with the data. If confirmed by government figures later on Wednesday, it will be the longest run of declines in more than a year.
However, the recovery in fuel consumption has been uneven as Asia grapples with a flood of Russian oil into an already well-supplied market. Refiners in the region are mulling run cuts as profits from turning crude into products such as diesel plunge, while time spreads for benchmark Dubai grade weakened.
“Oil prices have remained fairly range-bound,” said Warren Patterson, the head of commodities strategy for ING Groep NV in Singapore. “There still appears to be some concerns over the broader demand outlook and weaker refinery margins will only be adding to these concerns.”
Crude has rebounded after tumbling to a 15-month low in mid-March following turmoil in the banking sector. A surprise announcement by OPEC+ on production cuts and curbed Iraqi flows have underpinned some of the gains, although exports from Iraq’s Kurdistan region could resume this week.
A keenly-watched economic survey from the Federal Reserve is scheduled to be released later on Wednesday and will provide further insight on the health of the US economy, along with the path of monetary policy. BM/DM