Oil Holds Gain With Mideast Conflict, China Stimulus in Focus
(Bloomberg) -- Oil steadied after its biggest advance in more than a week, as traders tracked developments in the Middle East and the impact on demand of China’s stimulus measures.
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Brent crude traded near $75 a barrel after rising 1.7% on Tuesday, with West Texas Intermediate above $71. Iran’s President Masoud Pezeshkian said that Israeli attacks in Lebanon “cannot go unanswered,” while also urging Western nations to come back to a nuclear accord and lift sanctions on his country.
The People’s Bank of China’s massive adrenaline shot for the economy on Tuesday boosted shares around the world, although it isn’t yet clear whether it will translate to higher energy demand in the biggest oil importer.
“Markets were clearly risk-on as euphoria about the PBOC ‘bazooka’ resonated through European and US hours,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore. “But an announcement bazooka runs the risk of being a peashooter in terms of execution or outcomes.”
Crude remains modestly lower this year, with the dour outlook in Asia’s largest economy and the prospect of higher supply from OPEC+ weighing on prices. The producer group on Tuesday doubled down on its outlier view that global oil demand will keep growing to the middle of the century.
In the US, the American Petroleum Institute reported commercial crude inventories fell by 4.34 million barrels last week, according to people familiar with the data. That would leave stockpiles at their lowest level since April 2022 if confirmed by official data later on Wednesday.
Meanwhile, Tropical Storm Helene strengthened as it moved toward the Gulf of Mexico, triggering the evacuation of some oil and natural gas platforms.
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