(Bloomberg) — Oil extended a run of lackluster trading as investors assessed mixed US inventory data and a persistent outlook for oversupply.
West Texas Intermediate was near $61, with prices undulating in a band of about $2 since early last week. Equities traded in the green after a two-day losing streak, providing some support to crude.
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The wider market strength gave futures some direction after a US government report showed crude inventories rose 5.2 million barrels last week. That’s the biggest increase since July, but lower than a mostly priced-in forecast by a closely followed industry group. Product inventories fell across the board, indicating resilient demand and limiting potential bearish momentum.
“A rebound in imports and subdued refining activity amid seasonal maintenance has encouraged a build to US crude inventories,” said Matt Smith, Americas lead oil analyst at market intelligence firm Kpler. “Observed crude export loadings were also materially lower than those reported by the EIA, contributing to the crude build.”
The US benchmark has fallen about 14% this year as increased production from OPEC+ and non-member nations amplified concerns that a global glut would form. The boss of commodities trader Mercuria said at the Adipec conference on Wednesday that an oversupply in the oil market is slowly forming and likely to be as much as 2 million barrels a day next year.
Meanwhile, India’s Reliance Industries, usually a major buyer of crude, sold a shipment of Iraqi oil to a refiner in Europe. The reasons for the move were unclear, but there’s heightened focus on the activity of Indian refiners after the US sanctioned Russia’s two largest oil producers, setting the stage for a possible slump in purchases from Moscow.
–With assistance from John Deane and Weilun Soon.
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