Oil Edges Higher With US Inventories, Supply Outlook In Focus

Oil edged higher after a mixed US inventories report, with traders also focused on the broader outlook for supply as OPEC+ presses on with output increases and American production expands.

Brent rose toward $66 a barrel after ending little changed on Tuesday, with West Texas Intermediate above $62. The American Petroleum Institute reported a drop of 1.8 million barrels at the Cushing, Oklahoma, hub last week, as well as declines in product holdings including gasoline. Nationwide crude holdings were estimated to have risen, although they remain near seasonal lows.

Crude remains under pressure from expectations that there’ll be an oversupply in the coming months, with the Organization of the Petroleum Exporting Countries and its allies ramping up production in a bid to reclaim market share. In the US, meanwhile, official forecasts point to domestic crude output climbing to a record this year, aided by gains in offshore supply.

Ukraine’s latest round of drone strikes against Russian oil infrastructure, meanwhile, has cut domestic processing and led to a surge in crude exports. Flows of unprocessed oil held close to a 16-month high in the past four weeks, according to vessel-tracking data monitored by Bloomberg.

“Until the physical market shows signs of softening via rising inventories, investors are likely to discount the impact of the production increases,” ANZ Group Holdings Ltd. analysts including Daniel Hynes said in a note.

Prices:

• Brent for December settlement rose 0.6% to $65.82 a barrel at 8:09 a.m. in Singapore.

• WTI for November delivery advanced 0.6% to $62.13 a barrel.