Oil Edges Lower as Market Tightness Eases, Pipeline Restarts
Oil fell as US data on stockpiles and production signaled an easing of market tightness, and a key European pipeline restarted flows.
(Bloomberg) — Oil fell as US data on stockpiles and production signaled an easing of market tightness, and a key European pipeline restarted flows.
West Texas Intermediate declined toward $91 a barrel in early Asian trading after rising on Wednesday following softer-than-expected US inflation data. US government figures showed inventories hit the highest since December as local output climbed. In Europe, flows from Russia along the southern Druzhba network resumed as a payment dispute was resolved.
Crude sank to a six-month low earlier this month as investors fretted that an economic slowdown would crimp demand. The drop erased all the gains seen since Russia’s invasion of Ukraine even as sanctions on the the world’s biggest energy exporter mounted. Later Thursday, investors get outlooks from both the International Energy Agency and Organization of Petroleum Exporting Countries.
The market’s easing is evident as key time spreads have narrowed. WTI’s prompt spread — the difference between the two nearest contracts — has shrunk to 70 cents a barrel in backwardation from $2.88 a month ago.