© Reuters.
(Bloomberg) — Oil held a two-day gain above $70 a barrel that was powered by a drop in U.S. fuel and distillate stockpiles and a broader market rally.
West Texas Intermediate was steady in early Asian trading following a surge of more than 4% on Wednesday. Gains in equities buttressed investors’ appetite for risk, outweighing concerns about the impact on energy demand from the rapid global spread of the delta coronavirus variant.
Crude has been on a roller-coaster ride this week, plunging on Monday on pandemic concerns and plans by the Organization of Petroleum Exporting Countries and its allies to add supply. That was followed by a rebound, with the Energy Information Administration also reporting that oil inventories at the key storage hub in Cushing, Oklahoma, fell to the lowest since January 2020.
The delta variant has ripped through Asia, spurring a flurry of renewed curbs by governments to check its spread. In Southeast Asia, Indonesia — the region’s largest economy — has imposed a patchwork of restrictions across the sprawling country following a record daily death toll. In the U.S., Texas reported the most confirmed infections in more than three months.
Brent’s prompt time spread was 62 cents a barrel in backwardation, a bullish pattern with near-dated prices above those further out. That compares with 57 cents a barrel on Monday.
©2021 Bloomberg L.P.
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