(Bloomberg) — Oil steadied after closing at a seven-week high as a sustained risk-on mood in wider markets outweighed signs of further stockpile growth.
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Brent crude traded above $85 a barrel after posting the highest close since April 30, while West Texas Intermediate was near $82. The S&P 500 rose to another record on Tuesday, and the optimism is spilling over into other risk assets like oil as traders bet that US interest rates will be lowered.
The American Petroleum Institute, meanwhile, reported US crude inventories rose by 2.3 million barrels last week, according to people familiar with the figures. If confirmed by official data, that would be the third increase in a row. Stockpiles at the Cushing, Oklahoma, hub also expanded, according to the API.
Oil has recovered from a loss at the beginning of the month, when OPEC+ said it would bring barrels back to the market, with the group clarifying that such a plan was conditional. On the demand side in Asia, refiners are restoring some capacity following maintenance, boosting crude consumption.
Still, with oil’s surge over the past two weeks, there are now signs that futures are nearing overbought levels. Brent’s relative strength index on a nine-day basis has exceeded 70, indicating that a pullback may be on the horizon.
Full-day trading volumes in oil futures are likely to be lower on Wednesday because of a holiday in the US.
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