Oil held steady after falling on Wednesday, with traders looking to U.S. stockpiles data and an OPEC+ meeting at the weekend for more clarity on the supply-demand outlook.

Global benchmark Brent crude traded near US$83 a barrel after falling 0.7 per cent in the previous session, while West Texas Intermediate was close to $79. Commodities followed bonds and stocks lower on Wednesday after a disappointing sale of U.S. Treasuries. That offset nervousness from another attack on a ship in the Red Sea, and Israeli comments that it probably wouldn’t be able to defeat Hamas before the end of this year.

Oil has risen this year on geopolitical conflicts and production curbs by the Organization of the Petroleum Exporting Countries and its allies. The group will likely consider factors including a drop in prices over the past month, a weaker Chinese demand outlook and healthy supplies from the Americas when ministers convene online on Sunday. The alliance is widely expected to prolong output cuts into the second half of 2024.

“There’s some caution in the market, with attention on slowing consumption just before the high-demand summer season,” said Will Sungchil Yun, a senior commodities analyst at SI Securities Corp. “But a surprise from OPEC+ can’t be completely ruled out and that could drive prices immediately higher.”

The market will also be looking at official U.S. oil and fuel stockpiles data due later on Thursday for a read on demand as the summer driving season gets under way. U.S. crude inventories fell by 6.49 million barrels last week, according to the American Petroleum Institute, which would be the largest drop since January if confirmed by official figures.

Meanwhile, the prompt timespread for Brent crude is getting closer again to a bearish contango structure that indicates supply is abundant when compared with demand.

Prices:

  • Brent for July settlement dropped 0.4 per cent to $83.28 a barrel at 10:53 a.m. in London
  • WTI for July delivery declined 0.3 per cent to $78.96 a barrel