Oil steadied after posting the largest drop in two weeks on signs of a US stockpile build coupled with weak technical indicators, Bloomberg reports.
West Texas Intermediate held above $74 a barrel after declining by 1.9% on Wednesday, with Brent crude near $80. The American Petroleum Institute reported nationwide inventories rose by 1.8 million barrels, according to a report seen by Bloomberg, with levels at Cushing also expanding. That’s feeding into signs supply is topping demand as the year-end approaches.
Official prints on US inventories, as well as gauges of output and demand, are due later Thursday from the Energy Information Administration. Crude volumes at the Cushing, Oklahoma, hub have risen for the past nine weeks, and a 10th build, if confirmed, would be the longest run of inflows since 2016.
Crude has risen about 8% since its December low as Houthi attacks on vessels in the Red Sea forced tankers and other ships to divert on longer voyages, hoisting costs. Despite a US-led task force to protect the key waterway, carriers including Hapag-Lloyd AG still say they will avoid the route.
Although “the attacks in the Red Sea are likely to keep markets on edge,” signs of inventory builds in the US “may exert downward pressure on crude oil prices,” said Redmond Wong, market strategist at Saxo Capital Markets Ltd.
On the technical side, both benchmarks have just formed a bearish “death cross” — with the 50-day moving average dropping below the 200-day figure — for the first time since September 2022. That pattern has often heralded further weakness in the past.