Oil held steady near a two-month high as signs of weaker demand in Asia vied with a decline in US crude stockpiles.
West Texas Intermediate was little changed at just under $84 a barrel after closing at the highest settlement price since mid-April on Wednesday. Brent crude also traded relatively flat on Thursday. Volumes are likely to be thin on Thursday due to a US holiday.
Crude is being supported by a drop of more than 12 million barrels in US inventories last week, the biggest decline in almost a year. In other supply news, Rosneft and Lukoil will cut oil exports from the Black Sea port of Novorossiisk in July as they resume operations at their refineries, Reuters reported.
Limiting the gains is Saudi Aramco’s decision to reduce the price of its flagship Arab Light crude by 60 cents a barrel to $1.80 a barrel above the regional benchmark for shipment in August. Traders and refiners expected Aramco to lower the official selling price by 90 cents, according to a survey.
The threat to Gulf of Mexico oil and gas production from Hurricane Beryl is diminishing as the storm spares major drilling areas and platforms in US federal waters, according to data from the hurricane center and Bureau of Ocean Energy Management. Major platforms including Exxon Mobil Corp.’s Hoover, Occidental Petroleum Corp.’s Boomvang and Shell Plc’s Perdido that were in the path Wednesday are now clear.
Crude has risen more than 14% from its recent lows in early June on OPEC supply constraints, expectations for higher summer demand, geopolitical risks and bullishness in equity markets. Gains have been pared by concerns about demand in China, the world’s biggest crude importer, which has seen muted buying activity.
“Geopolitics and weather are keeping oil prices well supported in the $80s for now,” Citigroup Inc. analysts including Eric Lee said in a note. “There are reasons to believe that current strength can ease, based on physical market and demand signals, even though hurricanes need to be carefully watched.”
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