Oil Holds Gain as Signs of Tight Market Offsets Demand Concerns

Brent crude traded above $83 a barrel after closing 0.8% higher on Wednesday, while West Texas Intermediate was near $78. Timespreads are signaling a tightening market, although the industry-funded American Petroleum Institute reported a big rise in US crude stockpiles. Official data is due later Thursday.

The absence of fresh drivers for oil has meant futures have often taken their cue from wider equity markets, with prices influenced by the ebbs and flows of global stocks during earnings and the release of economic data.

Crude is trading near the upper band of the year’s range as investors juggle a gloomy demand outlook from top importer China with rising geopolitical risks in the Middle East and disruptions in the Red Sea. In the US, minutes from the Federal Reserve’s latest meeting show most officials remain worried about the risk of cutting borrowing costs too soon — a headwind for energy demand.

In the Middle East, efforts are continuing to ink a new deal to free hostages held by Hamas in Gaza, Israeli Minister Benny Gantz said at a press conference. If a hostage deal isn’t successfully negotiated, the Israeli military will enter Rafah during Ramadan, he reiterated.

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