(Bloomberg) -- Oil erased an earlier drop after a run of losses as concerns about Chinese demand and continued uncertainty over the timeline for U.S. Federal Reserve interest-rate cuts vied with signs of another inventory draw in the U.S.
Brent bounced off of US$84 a barrel to trade little changed, having fallen in the three previous sessions.
The American Petroleum Institute said crude stockpiles shrank by 1.92 million barrels last week, with a drawdown also logged at the key Cushing, Oklahoma, hub, according to people familiar with the figures. Inventories posted a hefty decline a week ago.
In China, the largest oil importer, data on Wednesday underscored the nation’s economic challenges, with deflationary pressures persisting as factory-gate prices fell. That followed a spate of earlier signals that suggest diminished appetite for crude from some of the nation’s refiners.
Oil remains comfortably higher for the year, with gains supported by OPEC+ supply cuts, as well as expectations for looser U.S. monetary policy. Federal Reserve Chair Jerome Powell said on Tuesday that while he was watching for signs of labor market weakness, policymakers still wanted to see more evidence that inflation was slowing before reducing borrowing costs.
Crude’s recent listless trading has seen gauges of volatility decline. Brent’s implied volatility — a forecast of likely movement in oil futures that’s tied to options pricing — is near the lowest level in about six years.
Prices:
- Brent for September settlement was 0.3% higher at $84.89 a barrel at 10:24 a.m. in London
- WTI for August delivery climbed 0.4% to $81.76 a barrel
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