Oil Halts Two-Day Drop as Report Points to Big US Stockpile Draw
Oil edged higher after a two-day drop as an industry report signaled a sizable drawdown in US commercial crude inventories.
Brent crude traded above $73 a barrel after shedding 1.8% over the previous two sessions. The American Petroleum Institute said US stockpiles shrank by 4.7 million barrels last week, which would be a fourth straight decline if confirmed by official figures later Wednesday.
Crude has traded in a narrow band for the past two months, supported by geopolitical tensions in the Middle East and Europe, and the threat of further sanctions on supplies from Iran and Russia. That’s been tempered by lackluster Chinese demand and expectations for robust production from non-OPEC+ nations such as the US, where President-elect Donald Trump has promised to encourage domestic development.
“Crude inventories globally still seem to be in decline with the API suggesting a large crude draw in the US last week, supporting prices,” said Giovanni Staunovo, commodity analyst at UBS Group AG.
There have also been signs of tightness in Middle Eastern markets, where the prices of several key grades have risen, according to traders who deal with those barrels. That has helped to dramatically narrow the difference in price between the Asian Dubai benchmark and Brent.
Brent for February settlement added 0.7% to $73.70 a barrel at 10:08 a.m. in London.
West Texas Intermediate for January delivery advanced 0.8% to $70.62 a barrel.
The contract expires on Thursday.
Source : Bloomberg
