Oil held most of a drop driven by a surprise jump in US crude stockpiles and the Federal Reserve signaling it’s not finished with rate hikes.
West Texas Intermediate futures edged higher on Thursday to trade near $68 a barrel, after falling 1.7% on Wednesday. US nationwide inventories rose by the most in four months, despite analyst expectations for a drop, while stockpiles at the key storage hub in Cushing, Oklahoma, swelled to a two-year high.
Fed officials paused their series of interest-rate hikes but projected borrowing costs will go higher than previously expected to tame what Chair Jerome Powell called surprising persistent inflation.
Crude has sunk by 15% this year amid concerns of a US slowdown and a slower-than-expected rebound in China’s economy, although it’s traded in a narrow range since early May. While there have been some bright spots for demand, the generally dour outlook has left Wall Street abandoning predictions for a sharply price rally this year, with JPMorgan Chase & Co. on Wednesday becoming the last of the major banks to slash crude price forecasts.
US crude stockpiles rose by 7.9 million barrels last week, while gasoline and distillates inventories also expanded, according to Energy Information Administration data. That’s a bearish signal as the US summer driving season gets underway.
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