Oil Edges Lower With Focus on US Inventories, Canada Wildfires
Oil slipped after two days of gains as signs of shrinking US inventories were offset by rain that slowed the growth of some blazes that had shut in Canadian production.
Brent traded around $65 a barrel after closing at a three-week high, while West Texas Intermediate was near $63. The American Petroleum Institute reported stockpiles fell by 3.28 million barrels last week, according to a person familiar with the data. That would be the biggest draw since March if confirmed by official figures later on Wednesday.
One Canadian oil sands operator restarted a site on Monday after wildfires that at one point shut about 7% of output in the fourth-largest producer. The blazes have put flows to critical American storage hubs at risk, and limited the impact of OPEC+ supply increases.
Crude rose earlier this week after the cartel’s move to boost production in line with expectations eased concerns of a bigger increase. It’s still down about 12% this year because of the group’s winding back of its policy to defend prices by curbing output and worries that US-led trade wars would hurt demand.
“In the short term, the market shows a slightly bullish trend amid volatility,” said Gao Mingyu, Beijing-based chief energy analyst at SDIC Essence Futures Co. “But OPEC+’s rapid output increase makes it difficult for the supply-demand tightness that’s driven by seasonal and geopolitical factors to persist.”
The OECD cut its outlook for global economic growth on Tuesday, with the US among the hardest hit. Meanwhile, President Donald Trump is pushing ahead with his tariffs, signing a directive that doubles rates on steel and aluminum.
Saudi Arabia led increases in OPEC oil production last month as the group began its series of accelerated increases, according to a Bloomberg survey. Nevertheless, the hike fell short of the full amount the kingdom could have added under the agreements.
Brent for August settlement slipped 0.4% to $65.38 a barrel at 11:14 a.m. in Singapore.
WTI for July delivery declined 0.4% to $63.14 a barrel
Source: Bloomberg
