Oil edged higher as signs of another inventory draw in the US eclipsed uncertainty on the timeline for Federal Reserve interest-rate cuts after testimony from Chair Jerome Powell.
Brent crude rose toward $85 a barrel after falling bu more than 3% over the last three sessions, with West Texas Intermediate below $82. The American Petroleum Institute said US 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. Total holdings sank more than 12 million barrels the prior week.
Oil remains comfortably higher for the year, with gains supported by OPEC+ supply cuts, as well as expectations for looser US monetary policy. 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.
Traders will scour a monthly report from the Organization of the Petroleum Exporting Countries later Wednesday for more on the global market outlook, before the corresponding view from the International Energy Agency a day later. – Bloomberg