Oil steadied after a three-day rebound, with traders monitoring developments in the Middle East and the fledgling recovery from this week’s rout in wider markets.
Brent traded near $79 a barrel and West Texas Intermediate was above $76, as signs of resilience in the US labor market bolstered stocks. The US, Qatar and Egypt are calling for a new round of ceasefire talks to end the war in Gaza, while the region braces for an expected Iranian attack on Israel.
Oil has rallied after Brent tumbled on Monday to a seven-month low, tracking a rout in global equity markets. Futures are set to end a four-week run of losses, with the halting of Libya’s biggest field, a sixth week of US stockpile draws and Ukraine’s incursions into Russia compounding the bullishness.
“Brent reached the bottom of a long-held range between $75 and $90 per barrel this week before stabilizing markets, geopolitical tensions, a continued drop in US crude stocks, and a technically oversold market condition all helped support a small and ongoing recovery,” said Ole Hansen, head of commodities strategy at Saxo Bank.
Meanwhile, jet fuel demand is on the mend in China. The rare bright spot comes after months of bearish signals, including data this week that showed that the world’s biggest crude importer shipped in the fewest barrels in almost two years in July.
