Oil rises above US$80 with OPEC+ decision and inventories in focus

Oil rose for a third day as data pointed to a large decline in U.S. stockpiles, while traders weighed the outlook for Chinese demand and a forthcoming OPEC+ meeting. 

West Texas Intermediate climbed above US$80 a barrel for the first time in a week after the industry-funded American Petroleum Institute reported inventories fell by almost 8 million barrels. At the same time, traders are watching the demand outlook in China as markets in Asia were buoyed by bets on its economy further reopening.

Crude has recovered in recent days as EU discussions on a Russian price cap continue. Without the measures, companies will have no access to European or U.K. insurance when transporting the country’s crude, potentially risking supply disruption. European diplomats have been seeking a compromise on the level of the U.S.-led cap, with U.S. energy security adviser Amos Hochstein saying the plan needs to strike a “delicate balance.”

“Mobility in China is nowhere near down to the extent it warrants a $10 selloff seen recently,” said Ole Hansen, head of commodities strategy at Saxo Bank A/S. “This is allowing the market to focus on the embargo and its potential negative impact on supply.”