Oil steadied near $69, with prices tussling between a hawkish rate outlook from central banks and a decline in US crude stockpiles.
(Bloomberg) — Oil steadied near $69, with prices tussling between a hawkish rate outlook from central banks and a decline in US crude stockpiles.
West Texas Intermediate rose 0.446% after closing 2.8% higher in the previous session. Federal Reserve Chair Jerome Powell said at least two interest-rate increases are likely necessary this year to keep bringing inflation lower, the latest central bank commentary suggesting further tightening to come.
US crude inventories shrunk by 9.6 million barrels last week, the largest draw in more than a month, according to the Energy Information Administration. Gasoline demand also surged to the highest since 2021.
The US benchmark is still on track for its first back-to-back quarterly decline since 2019 as China’s lackluster economic recovery and aggressive monetary tightening by the Federal Reserve weighed on prices. Supply has also been plentiful, bolstered by resilient exports from Russia, despite sanctions.
“If US stocks keep falling because of healthy worldwide demand for domestic grades and possibly buoyant US gasoline consumption as the driving season kicks off it might just be the harbinger of what to expect in coming months,” said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd.
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US jet fuel demand rose to the highest since 2019 last week, the EIA reported on Wednesday. Consumption should continue to climb as the nation heads into the July 4th weekend, with a record number of motorists set to hit the road.
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