Oil pared its losses after a smaller-than-expected rise in US crude inventories.
(Bloomberg) — Oil pared its losses after a smaller-than-expected rise in US crude inventories.
West Texas Intermediate edged higher to trade near $81 a barrel, fluctuating throughout the session on Wednesday. US inventories rose 533,000 barrels last week, much less than anticipated after an industry report forecast crude increasing over 3 million barrels.
Gains though were muted by ongoing outlook concerns. Earlier, mixed company earnings and weaker business activity reinforced worries about the US economy on Wall Street. While there’s an expectation that China’s oil demand will rise after it ditched restrictive Covid rules, uncertainty lingers over the strength of the rebound.
“It’s definitely a risk-off day,” said Matt Sallee, a portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets. The fact that crude is positive is frankly pretty heroic, in my opinion, given how soft the equity markets are.”
Crude is largely unchanged so far this month after a weak start to the year with recession fears running through the market. The outlook for China and a weaker dollar — which makes commodities priced in the currency more attractive — have helped oil claw back some ground.
More uncertainty lies ahead with sanctions and price caps on Russian petroleum products set to kick in next month. That, coupled with refinery outages in the US due to a cold snap in the north, had been causing oil product cracks to rally in recent days.
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–With assistance from Immanual John Milton.
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