Oil swung between gains and losses as traders weighed additional Russian supplies against further Chinese economic stimulus.
(Bloomberg) — Oil swung between gains and losses as traders weighed additional Russian supplies against further Chinese economic stimulus.
West Texas Intermediate edged above $80 a barrel, swinging in a roughly 2% range amid thin summer trading volumes. Russia’s seaborne crude flows soared to an eight-week high, countering a move by China’s largest banks to cut interest rates.
Physical markets continue to show signs of tightness. Stockpiles at the key storage hub of Cushing, Oklahoma, have declined to the lowest level since January, and refined products are also trading at giant premiums to crude as the US tropical storm season picks up. WTI’s prompt-spread is trading 44 cents in backwardation, up from 29 cents a week ago.
Oil futures have retreated from multi-month highs, weighed down by the prospect of expanding crude supplies. In the US, there are expectations that the Federal Reserve isn’t yet done with its campaign of monetary tightening to quell inflation. Meanwhile, China’s biggest refiner, Sinopec, said the nation’s product demand in the second half would expand at a slower pace than in the first.
“The oil market remains rangebound, with underlying support stemming from continued tightness across fuel products,” said Ole Hansen, head of commodities strategy at Saxo Bank.
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