Oil Halts Two-Day Drop as Iran Tensions Vie With Stockpile Build
(Bloomberg) -- Oil edged higher after a two-day drop as nervousness over a potential Iranian attack on Israel outweighed the first increase in US crude stockpiles in seven weeks.
Brent traded near $80 a barrel after falling by 3.1% over the previous two sessions, with West Texas Intermediate above $77. Two weeks after Iran vowed to retaliate for the killing of a senior Hamas leader on its soil, tension is building over what form the attack might take.
US crude inventories rose by 1.36 million barrels last week, in a surprise increase, official data showed on Wednesday. The build was notable given a report from the American Petroleum Institute a day earlier that pointed to a sizable drop. Stockpiles remain below seasonal averages, but the data may increase concern about flagging demand.
![](https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iJB61cgJ67is/v2/-1x-1.png)
Crude has fallen from a recent peak in early July, weighed down by a dour outlook for consumption in No. 1 importer China, with gasoline demand there being damped by growing use of cleaner fuels. The country’s apparent oil demand fell 8% from a year ago in July, government data showed Thursday.
“The data doesn’t look great,” said Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. “It only reinforces the demand concerns that have been lingering in the market for a while, and with China expected to make up almost 60% of global demand growth this year, these worries are unlikely to disappear anytime soon.”
Those concerns had led OPEC to lower its global demand forecast for 2024 in its monthly report issued earlier this week, while International Energy Agency data showed the market would be in surplus next quarter if the cartel went ahead with a plan to restore supply.
In the US, a gauge of inflation — the core consumer price index, which excludes food and energy costs — eased for a fourth month on an annual basis in July, keeping the Federal Reserve on track to lower interest rates next month.
©2024 Bloomberg L.P.
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