Oil steadies as traders look to China, OPEC for fresh triggers

Oil steadied as investors weighed the extent of China’s demand recovery and the likelihood of OPEC+ keep output unchanged.

West Texas Intermediate was little changed above $80 a barrel after declining by almost 2 per cent on Tuesday as mixed corporate earnings spurred concerns about a US slowdown. China’s ditching of Covid Zero has boosted expectations that energy demand will eventually pick up in the world’s largest crude importer.

Delegates from the Organization of Petroleum Exporting Countries said that they expect an advisory committee of ministers to recommend keeping oil production at current levels when they meet next week.

Crude has rebounded since collapsing about 10 per cent in the year’s first two sessions of the year on recessionary fears. The recovery has rested largely on hopes that Chinese consumption will pick up, although a weaker dollar has also aided commodities.

Traders are also tracking Russian flows, with sanctions and price caps on petroleum products set to kick in next month.

The American Petroleum Institute reported US crude inventories rose 3.38 million barrels last week, according to people familiar with the figures. Government data — which showed commercial stockpiles swelled by more than 27 million barrels in the prior two weeks — are due later Wednesday.

Further insight into the market will come as supermajors report quarterly earnings in the coming days, starting with figures and commentary from Chevron Corp. on Friday. Amid a milder winter in Europe and lingering concerns over the economic outlook, there are expectations this set of results could be the last strong ones for the industry, marking a peak of the cycle.