(Bloomberg) — Oil prices rose to an eight-week high on falling U.S. inventories, Chinese stimulus and attacks on Russian refineries.
Most Read Articles on Bloomberg
West Texas Intermediate topped $76 a barrel, its highest intraday price since Dec. 1. U.S. crude oil inventories fell by more than 9 million barrels last week, to their lowest level since October. Meanwhile, a drone attack sparked a fire on Russia’s Black Sea coast on Thursday, damaging a major oil refinery. This followed another strike earlier this week that jeopardized the flow of Russian oil.
Oil prices are currently showing tentative signs of breaking out of the narrow range in which they have traded throughout the year. Traders see $76.20 as a threshold that could prompt further buying by commodity trading algorithms.
“While the energy supply risk embedded in prices has stabilized to some extent in recent trading, CTA has significant dry powder to react to a breakout,” said Daniel Ghaly, commodity strategist at TD Securities. “
In China, the government announced it would cut banks’ reserve requirements within two weeks, suggesting further support measures may follow to support the energy consumption outlook of the world’s biggest oil importer.
Geopolitical tensions in the Red Sea, which have disrupted global trade, have so far been largely offset by expectations that non-OPEC oil producers will continue to increase supplies.
“The issue around the Red Sea remains a worrying issue, and in the macro world it doesn’t take long for things to continue to simmer a little bit in the oil pot,” said John Evans, an analyst at brokerage PVM. “Any form of stimulus from China is usually warmly welcomed in oil markets.”
Click here to receive Bloomberg’s Energy Daily newsletter in your inbox.
Most Read Articles on Bloomberg Businessweek
©2024 Bloomberg LP