Oil steadied after jumping almost 3% on Wednesday as optimism the US would resolve its debt-ceiling impasse triggered broad gains in financial markets, offsetting a largely bearish US stockpile report.
(Bloomberg) — Oil steadied after jumping almost 3% on Wednesday as optimism the US would resolve its debt-ceiling impasse triggered broad gains in financial markets, offsetting a largely bearish US stockpile report.
West Texas Intermediate futures traded below $73 a barrel after the biggest daily advance in almost two weeks. President Joe Biden expressed confidence that negotiators would reach an agreement to avoid a catastrophic default, while House Speaker Kevin McCarthy remained hopeful of a deal.
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Oil is still lower for the year as monetary tightening in the US and China’s lackluster economic growth weigh on the demand outlook, while supply has remained robust. Refiners in South Korea and Taiwan recently snapped up millions of barrels of US crude, adding some bullish optimism.
US crude inventories rose by 5 million barrels last week, the biggest gain since mid-February, according to the Energy Information Administration. Stockpiles climbed at the storage hub at Cushing, Oklahoma, while distillate demand fell to the lowest seasonal level in a decade, excluding in 2020.
“The oil market continues to be driven by external developments, rather than fundamentals,” said Warren Patterson, head of commodities strategy for ING Groep NV. “The market ignored a largely bearish EIA inventory report.”
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