Oil Rises As US Stockpiles Fall, Algorithm Trades Pour Back In
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(Bloomberg) -- Oil’s recovery rally stretched into a third day as US stockpiles declined the most since November and algorithm-trading accelerated buying.
West Texas Intermediate rose to an intraday high above $74 a barrel after a government report showed US stockpiles fell more than 7 million barrels last week, according to Energy Information Administration data.
With the market more confident banking turmoil will be contained, commodity trading advisors are starting to buy back into oil futures. Oil’s selloff has reached a point of exhaustion and prices are recovering as algorithm purchases kick in, said Dan Ghali a commodity strategist at TD Securities.
Oil has been buttressed by factors including supply risks and resurgent demand from China as the nation recovers from pandemic lockdowns. Still, uncertainty continues to weigh on the market, following a banking crisis that has hit institutions in both the US and Europe.
The US is urging Iraq and Turkey to resume exports from the port of Ceyhan after a dispute involving Kurdish authorities halted around 400,000 barrels a day of shipments, tightening the market and helping to boost prices. One of the biggest oil producers in Iraqi Kurdistan, Norway’s DNO ASA, has started to lower production as the dispute drags on.
Still, both oil benchmarks remain on track for a monthly loss amid concerns over a potential US recession and resilient Russian flows. In addition, the OPEC+ alliance is showing no signs of adjusting output when its Joint Ministerial Monitoring Committee meets next week.
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