(Bloomberg) — Oil advanced after four days of losses as an industry report pointed to shrinking US crude stockpiles, offsetting wavering OPEC cuts.
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West Texas Intermediate futures rose to trade near $78 a barrel after falling 2% over the previous four sessions. Brent climbed above $82. The industry-funded American Petroleum Institute reported crude inventories slid by 5.5 million barrels last week, according to people familiar.
That would be the first drop in seven weeks if confirmed by US government data later Wednesday. The API figures also showed crude stockpiles at Cushing, Oklahoma, the delivery point for WTI, fell by almost 1 million barrels.
Oil slipped on Tuesday after OPEC said its latest supply cuts had stalled as Iraq produced above its quota for a second month, although benchmark futures have been stuck in a tight trading range this year. US inflation, meanwhile, continues to run hot, muddying the path of monetary policy.
The API figures provided a “more upbeat take on oil demand,” said Jun Rong Yeap, a market strategist at IG Asia Pte in Singapore. A bullish trigger that could help drive oil futures out of their tight range may come in the form of rising geopolitical tensions or an improving Chinese economy, he added.
The Energy Information Administration said on Tuesday that US oil production will increase faster than previously expected this year, which will help cushion global supplies as OPEC+ cuts. The EIA made the forecast in its Short-Term Energy Outlook, also raising its output estimate for 2025 by 1.2%.
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