Oil holds nine-month high as supply risks offset US stockpiles
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West Texas Intermediate futures traded above US$84 a barrel after climbing 3 per cent over the previous two sessions.
PHOTO: REUTERS
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SINGAPORE – Oil held gains near the highest level in almost nine months as concerns over a possible escalation in hostilities between Russia and Ukraine overshadowed the first gain in US crude stockpiles in four weeks.
West Texas Intermediate (WTI) futures traded above US$84 a barrel after climbing 3 per cent over the previous two sessions.
There is heightened tension between Kyiv and Moscow after a Ukrainian drone attacked a Russian-flagged oil tanker over the weekend in the Black Sea, a key waterway for the nation’s exports.
While US government data showed crude inventories rose by almost six million barrels last week, investors instead focused on shrinking petrol and distillate stockpiles, which each declining the most in three months.
Oil has rallied since late June as Saudi Arabia and Russia pledged supply curbs, although headwinds still persist including a sluggish economic recovery from China.
The Organisation of the Petroleum Exporting Countries will release its monthly market report later on Thursday, providing investors with a snapshot of the market.
Closely watched measures of oil market health have also strengthened, with the nearest time spreads for WTI and global benchmark Brent leaping into larger backwardation – a structure that indicates scarcer supply. BLOOMBERG
