Oil held gains near the highest level in almost nine months ahead of key US inflation data, as traders weighed signs of tighter supplies.
(Bloomberg) — Oil held gains near the highest level in almost nine months ahead of key US inflation data, as traders weighed signs of tighter supplies.
West Texas Intermediate futures traded above $84 a barrel after climbing 3% over the previous two sessions. Investors will be watching the consumer price index read due Thursday for clues on the path forward for monetary tightening against the backdrop of an oil market that has shown renewed signs of strength this week.
Asian refiners have bought at least 24 million barrels of US crude for November arrival, traders said Thursday. It’s the second month in a row that has seen a big buying spree of US supplies from the region’s refiners. In recent days key market gauges have also been pointing to increase levels of tigtheness, while options markets have also turned more bullish.
“Hot money continues to flow into the oil complex,” said Keshav Lohiya, founder of consultant Oilytics. “The question remains if this is just a beginning of speculative money flowing in or a bull trap before the majority of market participants return in September.”
There’s heightened tension between Kyiv and Moscow after a Ukrainian drone attacked a Russian-flagged oil tanker over the weekend in the Black Sea, a key waterway for the nation’s exports. Oil has rallied since late June as Saudi Arabia and Russia pledged supply curbs, although headwinds still persist including a sluggish economic recovery from China.
OPEC is also scheduled to release its monthly report later, while the IEA will give its assessment on Friday.
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