Oil Extends Gains as Report Points to Shrinking US Stockpiles

(Bloomberg) -- Oil extended gains after an industry report signaled a big draw in US crude stockpiles as an ongoing dispute halts exports from Turkey.

West Texas Intermediate futures rose for a third session toward $74 a barrel, with easing concerns over the banking crisis adding to bullish sentiment. The American Petroleum Institute reported crude inventories dropped by 6.1 million barrels last week, according to people familiar with the data. That will be the biggest decline this year if confirmed by government figures later Wednesday.

The US is urging Iraq and Turkey to resume exports from the port of Ceyhan after a dispute involving Kurdish authorities halted around 400,000 barrels a day of shipments, tightening the market and helping to boost prices. However, Iraq’s government said it’s up to Kurdistan to break the deadlock. 

Oil is still on track for a fifth monthly loss after concerns over a potential US recession and resilient Russian flows weighed on prices. OPEC+ is showing no signs of adjusting production when its Joint Ministerial Monitoring Committee meets next week, staying the course amid turbulence in financial markets.

“Supply concerns continue to support oil prices,” said Warren Patterson, the Singapore-based head of commodities strategy at ING Groep NV. “Market attention will increasingly turn to OPEC+ with next week’s JMMC meeting.”

US crude inventories have gained ten out of 11 weeks so far this year, rising to the highest level since May 2021. Analysts surveyed by Bloomberg forecast the Energy Information Administration will report stockpiles expanded again last week, increasing by a further 1.75 million barrels.

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