Oil nudged higher ahead of U.S. economic data, as the market seeks a catalyst to break out of the tightest trading range in over three years.

Brent was close to US$86 a barrel and has swung in a narrow range of $1.76 so far this week, the smallest fluctuation since early 2021. Traders are watching for a range of U.S. economic data over the next two days, including personal consumption and employment figures, which could set the tone for oil and broader markets.

Even an unexpectedly large build of U.S. crude stockpiles failed to drive prices lower on Wednesday, with West Texas Intermediate closing little changed. The benchmark hovered around $81 a barrel on Thursday.

Oil is on track for a monthly gain and there are expectations prices will climb further over the next quarter on seasonal strength. Futures have taken their cues from the moves of wider stock markets recently, and the outcome of upcoming elections in Iran and France could add further volatility.

“Crude oil is actually doing rather well, trading higher despite yesterday’s overall price-negative EIA report,” said Ole Sloth Hansen, vice president and head of commodity strategy at Saxo Bank. “The market may be warming to the thought that OPEC may struggle to to add barrels back into the market from October.”

U.S. Gulf Coast crude inventories ballooned by 2 million barrels last week and remain at the highest since 2020 on a seasonal basis, while overall stockpiles are the biggest since April. There are signs of lackluster fuel consumption, with measures of gasoline and jet fuel demand flagging.

Prices:

• Brent for August settlement rose 0.8% to $85.88 a barrel 8:03 a.m. in New York
• WTI for August delivery was 0.6% higher at $81.39 a barrel