Oil holds gain with stockpile data and Iran sanctions in focus

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Oil held a gain as an industry report showed shrinking US crude stockpiles, and traders tracked progress toward fresh sanctions against Iran.

Brent was steady above $88 a barrel after climbing 1.6% on Tuesday, while West Texas Intermediate was over $83. The American Petroleum Institute reported nationwide crude inventories fell 3.2 million barrels last week. If confirmed by official data later Wednesday, that would be the first drop in five weeks.

The US House of Representatives, meanwhile, passed tougher measures against Iran in response to an attack on Israel, with the Senate set to ratify them. While some Asian refiners are bracing for added scrutiny, the move isn’t expected to have a significant market impact.

Crude has climbed this year, lifted by supply cutbacks from OPEC+, as well as geopolitical risks in the Middle East and Russia. Traders are also weighing the outlook for US monetary policy, with slower US business activity growth being interpreted as bullish as it feeds into expectations for lower interest rates. Data on the Federal Reserve’s preferred inflation gauge is due later this week.

The API also flagged a drawdown in overall gasoline levels, while crude stockpiles at the Cushing, Oklahoma, hub were seen shrinking.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow