Oil rose, boosted by stocks in a choppy session, as traders weighed additional supplies from Russia against fresh Chinese economic stimulus.
West Texas Intermediate rose above $81 a barrel, trading up more than 2% amid low summer trading volumes. Flows of seaborne crude from Russia soared to an eight-week high, curbing gains driven by rising equities and a move by China’s biggest banks to cut interest rates.
Physical markets continue to show signs of tension. Inventories at the key storage hub in Cushing, Okla., have declined to their lowest level since January, and refined products are also trading at steep premiums to crude oil as the U.S. tropical storm season ramps up. The fast spread WTI is trading at 49 cents in a pullback, 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, it is expected that the Federal Reserve is not yet done with its monetary tightening campaign to quell inflation. Meanwhile, China’s biggest refiner Sinopec said demand for the country’s products in the second half would expand at a slower pace than in the first.
“The oil market remains limited, with underlying support coming from continued tightness in fuel products,” said Ole Hansen, head of commodities strategy at Saxo Bank.
Prices:
- WTI for October delivery rose $1.06 to settle at $81.16 a barrel in New York.
- Brent for October settlement rose $1.07 to settle at $85.49 a barrel.
