Oil steadied after rising more than 3% Tuesday on signs that China is shifting into stimulus mode and after the US said it plans to replenish strategic reserves.
West Texas Intermediate traded above $69 a barrel. Beijing is considering broad stimulus measures to shore up its economy, while slowing inflation could give the Federal Reserve room to pause interest-rate hikes for the first time in 15 months. The US plans to buy about 12 million barrels of oil this year to refill its depleted emergency reserves, according to people familiar.
Crude has lost about 17% since a peak in mid-April as a worsening demand outlook and resilient exports from Russia — despite pledged output cuts — weighed on prices. Sentiment now seems to be improving given the more bullish signals emanating from China and the US, and an OPEC report that suggested Saudi Arabia’s output cuts will succeed in tightening supply in the second half of the year.
Investors will be keenly watching for the International Energy Agency’s monthly report, due later Wednesday, for further clues on the state of the market.
Meanwhile, the industry-funded American Petroleum Institute reported US nationwide crude inventories expanded by 1 million barrels last week. Gasoline and distillate stockpiles, and supplies at the Cushing, Oklahoma storage hub also rose. Official data is due later Wednesday.
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