(Bloomberg)– Oil extended a streak of lackluster trading as investors assessed mixed U.S. inventory data and a persistent outlook for oversupply.
West Texas Intermediate was near $61, with prices hovering in a band around $2 since early last week. Stocks traded in the green after a two-day losing streak, providing some support to crude.
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Broader market strength gave futures some direction after a U.S. government report showed crude inventories rose by 5.2 million barrels last week. It was the biggest increase since July, but lower than a largely discounted forecast from a closely watched 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 have encouraged a rise in U.S. crude inventories,” said Matt Smith, lead Americas oil analyst at market intelligence firm Kpler. “Observed crude oil export loadings were also materially lower than those reported by the EIA, which contributed to the increase in crude oil.”
The U.S. benchmark has fallen about 14% this year as rising OPEC+ and non-OPEC output amplified concerns that a global glut would form. The head of commodities trader Mercuria said at the Adipec conference on Wednesday that an oversupply is slowly forming in the oil market and will likely reach 2 million barrels per day next year.
Meanwhile, India’s Reliance Industries, normally a major crude buyer, sold a cargo of Iraqi oil to a refinery in Europe. The reasons for the move were unclear, but there is increased focus on Indian refinery activity after the United States sanctioned Russia’s two biggest oil producers, setting the stage for a possible drop in purchases from Moscow.
–With help from John Deane and Weilun Soon.
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