Oil Rises In Choppy Session As U.S. Crude Data Send Mixed Signals
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![Storage tanks at the Ecopetrol Barrancabermeja refinery in Barrancabermeja, Colombia, on Tuesday, Feb. 15, 2022. Ecopetrol says it expects organic investments in the range of $17b-$20b for 2022-2024, of which 69% is expected to be for upstream projects. Photographer: Ivan Valencia/Bloomberg](https://media.assettype.com/bloombergquint%2F2024-02%2Feed8f1ac-42db-4fe2-997f-520d399d91dd%2F_1x_1.jpg?rect=0%2C105%2C2000%2C1125&auto=format%2Ccompress&w=200)
(Bloomberg) -- Oil edged higher in a choppy session as traders weighed a mixed US inventory report, with algorithms exacerbating price swings.
West Texas Intermediate rose 0.8% to settle slightly below $74 a barrel after oscillating in a narrow $1 range. Prices briefly rallied above $74 a barrel, a resistance level that triggered selling among trend-following algorithms.
Even with the swings, futures remained in the roughly $5 channel where they’ve spent most of this year as a report from the US Energy Information Administration sent the market mixed signals. US gasoline inventories fell 3.15 million barrels last week, defying expectations for a decline and indicating stronger demand for crude. Still, national oil inventories rose the most since November, keeping a lid on prices.
Meanwhile, the Iran-backed Houthi militant group said it targeted two ships in the southern Red Sea, the latest in a string of attacks that has forced a major re-routing of global trade. The US has vowed more strikes against Iranian forces and their proxies in the region.
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Crude is up about 3% this year, with the Middle East war premium and rising transport costs largely canceled out by a mixed macroeconomic outlook. The lackluster price moves are masking a boom in oil-derivatives trading, with aggregate open interest across the main futures contracts rising to the highest since March 2022.
“It continues to remain a narrow, range-driven market for crude,” said Keshav Lohiya, founder of consultant Oilytics. “One of the biggest reasons behind the oil markets absorbing all these geopolitical risk premiums has been the silent supply growth from non-OPEC countries.”
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