Oil prices steady after yesterday's drop

June 26, 2024 (MLN): Oil steadied after a yesterday's decline as an industry report signaled a small build in US crude inventories ahead of official data.

Brent crude traded near $85.34 per barrel after falling 1.36% yesterday.

While West Texas Intermediate crude (WTI) was at $81.22 per barrel.

The American Petroleum Institute reported crude stockpiles rose by about 900,000 barrels last week, Bloomberg reported, citing people familiar with the figures.

Holdings at the Cushing storage hub declined, however.

The Energy Information Administration is scheduled to release its data on inventories, refining and fuel demand later Wednesday.

Oil is on track for a monthly advance and analysts are becoming more bullish about the outlook in the next quarter on a tightening market.

An escalation of geopolitical tensions from Yemen to Russia could also underpin further price gains.

Later this week, traders will be watching inflation and other economic data for clues on the path forward for interest rates.

“Tightening fundamentals through the third quarter of the year leaves us supportive toward the market,” said Yeap Jun Rong, a market strategist for IG Asia Pte in Singapore. In the short term, there’s expected to be caution ahead of the release of inflation data this week, he added.

Prompt time spreads for Brent and WTI have widened in a bullish backwardation structure this month, and money managers have recently increased their bets on a range of products including ICE gasoil, Europe’s diesel benchmark.

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