(Bloomberg) — Oil fell, paring a modest monthly gain, after US crude inventories expanded and as traders prepared to parse US data that’ll help frame expectations for monetary policy.
Most Read from Bloomberg
West Texas Intermediate dropped toward $78 a barrel following a 0.4% decline in the prior session, when Brent closed below $84. Nationwide US stockpiles grew for a fifth straight week, although the 4.2 million barrel build was smaller than an industry report had predicted. Cushing inventories also gained.
The Federal Reserve’s favored inflation gauge is due later Thursday, and follows a string of central bank officials saying in recent weeks that they’re in no rush to start cutting interest rates. Their decision will influence the dollar, the value of commodities, and wider conditions for energy demand.
Crude is set for a second monthly gain, although prices remain within a tight trading band. The advance has been supported by supply cuts from OPEC and its allies, and the group is widely expected to agree to prolong reductions into the second quarter. Still, concerns about the demand outlook remain, with China’s consumption growth likely to slow due to a softer economy.
At present, positive signals persist, with timespreads in a bullish, backwardated pattern. The market “does feel relatively tight,” according to Trafigura Group’s chief economist, Saad Rahim, who cited factors including signs of life in global manufacturing and petrochemicals. “You’re hearing the phrase ‘upside risk’ a lot more than you have in the past couple of years.”
To get Bloomberg’s Energy Daily newsletter into your inbox, click here.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.