(Bloomberg) -- Oil was steady after closing at a three-month high with investors assessing the outlook for supply and demand as the US summer driving season ramps up and China emerges from virus lockdowns.
West Texas Intermediate futures traded above $119 a barrel after settling 0.8% higher on Tuesday. The American Petroleum Institute reported that US gasoline stockpiles rose by 1.82 million barrels last week, according to people familiar with the data. That’s unlikely to provide much relief to a tight fuel market, with inventories at the lowest seasonal level in nine years.
The oil market has maintained its upward momentum this year as economies rebounded from the pandemic, although Russia’s invasion of Ukraine and a virus resurgence in China has led to extreme volatility at times. Beijing continues to roll back its Covid curbs as infection rates ease.
Russia’s war in Ukraine has fanned inflation, driving up the cost of food to fuels. Treasury Secretary Janet Yellen said that the US is actively involved in talks about a potential oil-buyers’ bloc designed to keep Russian crude on global markets, but at the same time limit revenues flowing to the country.
“Oil remains well supported on dips right now,” said Jeffrey Halley, a senior market analyst at Oanda Asia Pacific Pte. “With China reopening, higher prices remains the path of least resistance.”
US crude stockpiles rose by 1.85 million barres last week, while inventories of distillates -- a category that includes diesel -- increased by 3.38 million barrels, the API said. Official government data is due later Wednesday.
Brent remains steeply backwardated, a bullish structure where near-dated contracts are more expensive than later dated ones. The prompt timespread for the global benchmark was $2.44 a barrel in backwardation on Wednesday, compared with $1.61 at the start of last month.