Oil Eases as Traders Assess Effects of China's Stimulus Package
Oil cooled after the biggest advance in more than a week as traders tracked developments in Libya and assessed the potential effect of China's stimulus measures.
West Texas Intermediate traded below $71 a barrel after rising 1.7% on Tuesday, with Brent crude falling to around $74 a barrel. United Nations-led talks on Libya's central bank crisis are set to resume Wednesday amid continued oil supply disruptions in the OPEC nation.
The People's Bank of China's adrenaline shot for the economy boosted crude on Tuesday, though it isn't yet clear whether it will translate to higher energy demand in the world's biggest oil importer. Geopolitics also remained in focus as Iranian President Masoud Pezeshkian said that Israeli attacks in Lebanon "cannot go unanswered."
In the US, data released Wednesday showed crude inventories fell 4.47 million barrels last week to the lowest since April 2022. Futures largely took the drawdown in stride after an industry group on Tuesday had projected a similar-sized drop.
Crude remains down this quarter on the dour outlook in Asia's largest economy and the prospect of higher supply from OPEC and its allies. The producer group on Tuesday doubled down on its outlier view that global oil demand will keep growing to the middle of the century.
"The market remains at risk of a supply glut if OPEC+ proceeds with plans to return some of its sidelined production," Rabobank analysts Joe DeLaura and Florence Schmit said in a report. "Geopolitical issues in the Middle East still support upward price risk in the long term."
Meanwhile, Tropical Storm Helene grew stronger as it moved into the Gulf of Mexico, triggering the evacuation of some oil and natural gas platforms.
WTI for November delivery lost 1.3% at $70.61 a barrel at 10:40 a.m. in New York.
Brent for November settlement shed 1.1% to $74.35 a barrel.
Source : Bloomberg
