Oil held a gain after US crude inventories fell the most since December, signaling the prospect for near-term supply tightness.
Brent traded near $74 a barrel, after rising 1.1 per cent Wednesday to close at the highest since late February, while West Texas Intermediate was steady below $70. American stockpiles shrank by 3.34 million barrels last week, dropping to the lowest in a month, while inventories of gasoline also dipped, according to government data.
Oil has trended higher since early March as sanctions and tariffs from the Trump administration raise the potential for supply disruption from producers including Iran and Venezuela. That’s prompted traders to snap up bullish oil options to hedge against price spikes.
“There have been fundamental justifications for the recent bounce in oil, yet one cannot help but conclude that it is the US trade policy that will be the ultimate and anxious judge of the direction of the next $10 to $15-a-barrel move,” said Tamas Varga, an analyst at brokerage PVM.
Major oil traders including Trafigura Group and Gunvor Group are bearish on crude prices over the rest of the year due to rising supply, particularly from outside OPEC+. The producer group is also scheduled to start reviving idled output next month, the first in a series of planned hikes.
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