Oil edged higher as traders assessed the impact of the latest round of supply curbs from OPEC+ and a U.S. industry report that pointed to another drawdown in nationwide commercial inventories.
West Texas Intermediate traded above US$72 a barrel, following announcements from Saudi Arabia and Russia that they would reduce supplies in a bid to stem a slide in prices. Traders were awaiting the kingdom's monthly official selling prices, expected Thursday.
The American Petroleum Institute estimated that nationwide U.S. crude inventories declined by 4.4 million barrels last week, according to people familiar with the data. Official figures will follow later on Thursday, with stockpiles last reported at the lowest level in almost six months. Crude remains about 10 per cent lower this year, with China's lackluster economic recovery and tighter monetary policy in the U.S. and Europe weighing on the outlook for demand. The surge in borrowing costs is leading to lower global oil inventories, possibly setting prices up for spikes further down the line.
“The oil balance will likely tighten and so will financial conditions,” said Tamas Varga, an analyst at brokerage PVM. “Persistent recession worries will probably encumber but not prevent oil from marching higher.” A large majority of U.S. Federal Reserve officials agreed that more tightening will likely be needed this year, the minutes from the Fed's latest meeting showed. Further hikes would aid the dollar, potentially making commodities priced in the currency less attractive. The greenback was flat on Thursday.Brent for September settlement added 0.3 per cent to US$76.89 a barrel.
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