Oil prices held gains as signs of tight supplies in the crude market offset concerns about weak demand, keeping prices in a tight range.
Brent crude was trading above $83 a barrel after closing up 0.8% on Wednesday, while West Texas Intermediate crude approached $78. The spreads for oil futures point to a tightening market, even as industry-funded American Petroleum Institute reported a big build in U.S. crude inventories. Official data is due later on Thursday.
The absence of new drivers for oil means that futures often take their cues from equity markets, with prices affected by the ups and downs in global stocks during earnings season and economic data releases.
Crude oil is trading near the top end of its year-to-date range as a gloomy demand outlook from top importer China is offset by rising geopolitical risks in the Middle East and unrest in the Red Sea. In the US, minutes from the Federal Reserve’s latest meeting showed most officials remain concerned about the risk of cutting borrowing costs too early, a headwind for energy demand.
In the Middle East, Israeli Minister Benny Gantz said in a press conference that efforts are continuing to sign a new deal to release the hostages held by Hamas in Gaza. He stressed that if the hostage deal is not successfully negotiated, the Israeli army will enter Rafah during the month of Ramadan.
