Oil Gains After Saudis Choose to Jack Up Prices Across Asia

(Bloomberg) -- Oil rose after Saudi Arabia unexpectedly increased prices of its main grade to buyers in Asia, and investors waited for clues on US monetary policy from the Federal Reserve.

Brent traded above $82 a barrel after dropping almost 2% in the week’s first two sessions. The decision by Riyadh to raise prices to Asia followed an announcement by the OPEC+ alliance that it will extend output cuts through June.

Fed Chair Jerome Powell is due to testify before the House Financial Services Committee later on Wednesday, where traders will be looking for clues about the central bank’s approach to cutting interest rates this year.

Crude prices have been on a slow and steady grind higher so far this year, supported by the OPEC+ cutbacks, tensions in the Middle East, and higher transport costs due to disruptions to shipping. The creeping pace of gains has crushed market volatility, and the Organization of the Petroleum Exporting Countries and allies agreed on Sunday to extend their existing output cuts to the end of June, potentially tightening the market and drawing down stockpiles.

US inventories are also in focus. The American Petroleum Institute said nationwide stockpiles rose about 400,000 barrels last week, according to people familiar with the data. While that’s a relatively small potential increment, it would be the sixth week of gains if confirmed by official figures due Wednesday.

©2024 Bloomberg L.P.