Oil Extends Gain as Lower US Stockpiles, Middle East in Focus
Oil rose for a second session after US crude inventories shrank, with the market monitoring the Middle East for any potential flare-up.
Brent traded near $73 a barrel after advancing 2% on Wednesday, while West Texas Intermediate edged above $69. US stockpiles of crude, gasoline and distillates — a category that includes diesel — all declined last week, according to data from the Energy Information Administration.
Oil plunged at the start of the week after Israel’s limited retaliatory strike on Iran, and on a renewed push to end the conflict with Hezbollah. However, the market has “relaxed too quickly” over Middle East risks and the potential resumption of hostilities, according to Standard Chartered Plc.
Still, the market faces bearish headwinds from sluggish Chinese demand and ample supply. OPEC+ is scheduled to start reviving production from December, though industry consultant Rystad Energy said the alliance isn’t likely to boost output this year because producers are “making huge money.”
“Trading logic is gradually returning back to fundamentals, with geopolitical premiums getting marginalized,” said Gao Jian, an analyst at Qisheng Futures Co., adding that risks are skewed to the downside.
Commodity and financial markets have two crucial events next week that could whipsaw prices — the US election and a meeting of China’s top legislative body, with investors watching for additional stimulus efforts to revive Beijing’s economy. The Asian nation is the world’s top crude importer.
Brent for December settlement, which expires Thursday, rose 0.6% to $73.00 at 12:02 p.m. in Singapore.
The more-active January contract gained 0.7% to $72.64.
WTI for December delivery climbed 0.6% to $69.03 a barrel.
Source : Bloomberg
