The oil market has been whipsawed over the last couple of months by Covid-19 restrictions across China and Russia’s invasion of Ukraine. The war has fanned inflation, driving up the cost of everything from food to fuels, with retail gasoline in the US hitting a fresh record ahead of the summer driving season.
Oil is up more than 30% for the year, after economies rebounding from the pandemic underpinned a robust start. The American Petroleum Institute reported US crude stockpiles rose by 1.62 million barrels last week, according to people familiar with the figures. Fuel inventories also expanded. Government data is due later Wednesday.
“In today’s session, the focus will be squarely on the US. Inflation data for April and a weekly update concerning oil stocks will be front and center of trader sentiment,” said Stephen Brennock an analyst at brokerage PVM Oil Associates Ltd.
Traders continue to monitor the EU’s efforts to agree sanctions on Russian oil imports. On Wednesday, Hungary said it will only agree if shipments via pipelines are excluded.
Shanghai reported a 51% drop in new coronavirus infections on Tuesday, with zero cases found in the community — a key metric for the city to end a punishing lockdown that’s snarled global supply chains and left tens of millions of people stuck inside their homes for about six weeks.