Oil Edges Lower With U.S. Stockpiles, OPEC+ Supply Policy In Focus

(Bloomberg) -- Oil fell after trading in a narrow range as traders weighed rising US crude inventories against expectations that OPEC+ will extend supply cuts.

West Texas Intermediate edged lower to settle near $78 a barrel, pulled down by broader risk-off sentiment. US crude inventories rose 4.2 million barrels last week, the Energy Information Administration said, a smaller buildup than the 8.4 million barrel gain projected in an industry report.

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The stockpile increase somewhat damps the narrative of stronger physical markets that had driven crude’s gains in recent sessions. Timespreads have been widening in a bullish, backwardated pattern — with near-term barrels priced above longer-dated ones. So-called physical market swaps and the WTI cash roll have also strengthened.

Oil is pushing toward a modest monthly gain, though prices remain within a relatively tight band. The advance has been supported by supply cuts from OPEC and its allies, with the group widely expected to agree to prolonging reductions into the second quarter. Prices have also been aided by tensions in the Middle East.

Still, concerns about the demand outlook remain. China’s crude consumption growth is expected to expand by just 1% this year as a post-pandemic recovery fades and adoption of new energy vehicles saps demand, China National Petroleum Corp. forecast in a report released Wednesday.

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