Oil Holds Drop After Industry Report Shows Rising US Stockpiles

Oil steadied after a decline as a report showed US inventories are continuing to expand, a sign supply may be running ahead of demand, Bloomberg reported.

Brent crude traded near $82 a barrel after dropping by 0.9% on Tuesday, while West Texas Intermediate was around $78. The industry-funded American Petroleum Institute said US nationwide stockpiles rose by 400,000 barrels last week, according to people familiar with the data. That would be the sixth week of gains if confirmed by official figures due Wednesday.

Global benchmark Brent has risen by about 6% this year, supported by tensions in the Middle East, higher transport costs due to disruptions to shipping and OPEC+ cutbacks. Gains have been capped by a still-shaky demand outlook, particularly in China, and surging supply from non-OPEC producers including the US, Brazil and Guyana.

China set a bullish target of around 5% growth for its economy this year, as top leaders tried to boost confidence in the world’s second-largest economy. But while Chinese Premier Li Qiang said support was needed on “all fronts,” his annual report to the legislature didn’t offer much fiscal firepower.

Federal Reserve Chair Jerome Powell will deliver his testimony before the House Financial Services Committee later on Wednesday, an event which will give further clues on the path of US monetary policy.

“China’s GDP growth target remained modest, and none of the announcements so far have been able to spark optimism,” said Charu Chanana, an analyst at Saxo Capital Markets Pte in Singapore. “Markets are awaiting dovish hints from Powell’s testimony to Congress today.”