Brent oil steadied ahead of key U.S. inflation data after rising about two per cent Tuesday on signs resilient Russian supply is starting to ease.
Futures in London traded near US$80 a barrel, a threshold that was last breached in early May. Investors will be watching U.S. consumer price index data later Wednesday for clues on the path forward for monetary tightening. Aggressive interest-rate hikes this year have weighed on the demand outlook.
Another headwind for the market has been strong Russian crude supply, despite sanctions due to the war in Ukraine. Flows are starting to subside, more than four months after the OPEC+ producer was due to slash output. Oil remains marginally lower this year, but OPEC+ heavyweights Saudi Arabia and Russia have pledged supply cuts to prop up prices. The global market is expected to tighten in the second half and stockpiles are forecast to draw through 2024, according to a report by the Energy Information Administration, which is due to release its weekly inventory figures later Wednesday.Brent for September settlement edged up 0.3 per cent to US$79.59 a barrel at 10:55 a.m. in London.
Data on futures and options positions later this week will show whether traders are doing more than covering short positions, Staunovo said. The EIA's stockpile data follows a report by the industry-funded American Petroleum Institute, which said inventories rose by three million barrels last week, according to people familiar with the data. Traders will also be watching monthly reports on Thursday from the International Energy Agency and OPEC for snapshots of the global oil market.
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