Oil held a modest gain after a mixed snapshot of U.S. inventories that included an unexpected drop in nationwide crude holdings.
West Texas Intermediate rose above USD79 a barrel after climbing by 0.8% in the previous session, while Brent closed near USD84. Overall stockpiles of crude declined by 1.36 million barrels last week, although inventories expanded at the Cushing storage hub to hit the highest level since last July.
Separately, the Biden administration raised the price it’s willing to pay to refill the country’s emergency oil reserves. The Energy Department said it will pay as much as USD79.99 a barrel, the first time an explicit ceiling has been set.
Crude has been on the decline since early last month as tensions in the Middle East have eased. Softening timespreads, poorer refining margins, and options skews remaining in a bias toward puts collectively suggest a weaker global market. In addition, OPEC+ production is in focus, with Russia pumping above an agreed-upon target before the cartel meets next month to decide whether to extend output curbs. – Bloomberg
