Oil steadied as investors weighed mixed US data on crude and petroleum stockpiles amid persistent concerns over the outlook for demand.
(Bloomberg) — Oil steadied as investors weighed mixed US data on crude and petroleum stockpiles amid persistent concerns over the outlook for demand.
West Texas Intermediate futures traded above $72 a barrel after gaining 1.1% Wednesday. Crude inventories at the Cushing storage hub rose for a seventh week, while gasoline stockpiles also gained, according to government figures. However, refinery utilization was at the highest level since 2019, providing some bullish sentiment for summer demand.
Oil is still down 10% this year as China’s sluggish economic recovery, interest rate hikes from the Federal Reserve and robust Russian crude flows weigh on prices. Investors will also be watching data on jobless claims later Thursday for clues on the path forward for US monetary policy.
“What is not helping is renewed inventory builds this week,” said Giovanni Staunovo, a commodities analyst at UBS Group AG. “The outlook is of a tighter market, but investors want to see it first before they believe it.”
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Saudi Arabia’s pledge over the weekend to cut more supply from the market in July led to an initial surge in prices on Monday, but optimism around the curbs has quickly faded. Citigroup Inc. said the cut wouldn’t offset weak market fundamentals, with the bank increasingly bearish on the outlook for the second half.
While US gasoline stockpiles rose for the first time in five weeks, inventories are still below the five-year seasonal average, according to Energy Information Administration data. The Memorial Day weekend at the end of May is typically the start of the nation’s summer driving season.
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