SINGAPORE – Oil steadied in Asia after tumbling 5 per cent on Tuesday as data pointed to a possible US recession and investors shunned risk assets.

Brent held above US$75 a barrel after closing at the lowest in more than five weeks.

Crude fell along with other commodities as figures showed a cooling US labour market ahead of what is expected to be the Federal Reserve’s final interest rate hike in its current tightening cycle.

Renewed concern about the United States’ banking sector added to selling pressure.

Crude has had a rough ride in 2023 despite China’s re-emergence from its restrictive zero-Covid policy and sizeable cuts to supply by the Organisation of Petroleum Exporting Countries and its allies including Russia.

The retreat has been spurred by concerns that the United States may be headed for a recession, and by Moscow’s ability to keep crude exports flowing amid the war in Ukraine.

“It would appear that macro trumps fundamentals, a trend that has become increasingly stronger in recent weeks,” said Mr Warren Patterson, head of commodities strategy at ING Group. “As for where the floor is for the market, US$70 a barrel should provide good technical support for Brent.”

In the US, data from the industry-funded American Petroleum Institute offered a mixed picture. Nationwide crude inventories contracted by almost four million barrels last week and distillate inventories also dropped, but there was a build-up in crude at the key hub in Cushing, Oklahoma, according to people familiar with the figures.

Government data was due later on Wednesday. BLOOMBERG