Oil holds near four-month high as report sees US stockpile gain

Image credit: Getty Images

Oil steadied in Asia — after closing at the highest since mid-April on concerns about an escalation of the ongoing Ukraine-Russia crisis — ahead of data that may show a swelling of US crude stockpiles.

West Texas Intermediate traded near $83 a barrel after rising 1.2 per cent on Tuesday. The American Petroleum Institute reported inventories expanded by 4.07 million barrels last week, according to people familiar. That would be the first gain in four weeks if confirmed by government data later Wednesday.

Oil prices rally after production cuts

Oil has rallied since late June following pledges by OPEC+ heavyweights Saudi Arabia and Russia to cut supply, but headwinds still linger.

China’s economic rebound remains sluggish and the Energy Information Administration on Tuesday lowered its forecast for US consumption of products this year.

There’s also heightened focus on the risk to Russian flows from the Black Sea after a Ukrainian drone attack on an oil tanker over the weekend.

President Volodymyr Zelenskiy told reporters in Kyiv that his nation would retaliate to prevent the OPEC+ producer from “blocking our waters.”

The International Energy Agency and OPEC will release reports later this week that will provide snapshots of the oil market, which is expected to tighten through the second half of the year.

Read: Aramco reports a drop in profits of 38% in Q2 2023