Oil holds modest loss as risk-off tone counters lower stockpiles

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

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Oil held a modest decline, with a risk-off tone in broader markets countering a drawdown in US stockpiles.

Brent crude traded near $88 a barrel after a 0.5% drop on Wednesday, with West Texas Intermediate close to $83. The drop came despite data showing nationwide crude inventories fell by a bigger-than-expected 6.37 million barrels last week as refineries ramped up processing and exports rose.

In wider markets, Asian equities were poised to open lower on concerns about the US tech sector, with a disappointing outlook from Meta Platforms Inc. fanning concerns. At the end of the week, the Federal Reserve’s preferred inflation gauge will provide clues about the path ahead for monetary policy.

Crude remains higher this year, aided by supply curbs from OPEC+ and tensions in the Middle East, although it’s pulled back from recent highs above $90 a barrel as geopolitical risks in the region eased. Options skews remain in a bearish tilt toward puts, while the world’s biggest oil exchange-traded fund — the US Oil Fund — posted its largest daily outflow on record.

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