Texas markets

Oil pulls out of bottom as corporate earnings boost markets

Oil pared losses as a rally in stock markets eclipsed rising crude and gasoline inventories.

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(Bloomberg) – Oil pared losses as a rally in stock markets overshadowed rising inventories of crude and gasoline.

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West Texas Intermediate for September delivery traded above $100 a barrel after falling more than 2% earlier in the session. Risk sentiment in broader markets supported crude even as a US inventory report showed increased inventories at the larger Cushing storage facility. Gasoline inventories rose more than expected by 3.5 million barrels last week, according to a report from the Energy Information Administration.

Demand for gasoline has increased week on week, but remains seasonally lower than it was at this time of year in 2020, when Covid lockdowns kept millions off the road.

“The EIA report was just good enough to keep crude out of session lows,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. “Volumes and open interest remain very low, so it’s clear that many are content to sit on the sidelines until we get more data.”

Oil prices have struggled to find meaningful direction in recent days as trading volumes have declined with summer trading. Open interest — the total number of contracts held by traders — for West Texas Intermediate fell to its lowest level since 2015, according to data from CME Group Inc.

Crude fluctuated around $100 a barrel as traders weighed the demand impacts of a potential recession with a weakened dollar and a pipeline outage that tightened the US market.