Oil steadied after the biggest three-day gain since March with falling U.S. crude and fuel stockpiles adding some positive signs to a market that’s still grappling with the latest Covid-19 resurgence.
Futures in New York traded near $68 a barrel after advancing almost 10% over the previous three sessions. American crude inventories fell for a third straight week, according to official government data, while gasoline stockpiles dropped more than expected. Investors will be watching the Jackson Hole meeting from Thursday for insights on how the Federal Reserve will ease stimulus.
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Oil has clawed back some losses this week following the worst streak of declines since October 2019. The fast-spreading delta variant of the virus has led to renewed restrictions on mobility and clouded the economic outlook, although China has managed to swiftly contain its latest outbreak.
U.S. crude stockpiles fell by 2.98 million barrels last week, according to Energy Information Administration data. Gasoline inventories slid by 2.24 million barrels, compared with the median estimate in a Bloomberg survey for a 1.5-million barrel decline. Cushing supplies rose marginally.
The prompt timespread for Brent was 97 cents a barrel in backwardation — a bullish structure where near-dated contracts are more expensive than later-dated ones — on Wednesday. That compares with 38 cents on Monday.