Oil rebounded after a three-session drop as technical levels provided a floor for losses and a government report showed another decline in US crude stockpiles.
US crude stockpiles shrank by 4.87 million barrels last week, figures from the Energy Information Administration showed. That was a bigger draw than indicated by the American Petroleum Institute. Still, gasoline inventories rose by the most since January, casting doubt over fuel demand in the heart of summer driving season.
West Texas Intermediate stuck near intraday highs above $82 as futures bounced off of the 100-day moving average, which has served as a support level for a month. Trend-following algorithms have been poised for selling since the beginning of the week, with the window for large-scale liquidations remaining open, Daniel Ghali, a commodity strategist at TD Securities, wrote in a note to clients.
Crude remains higher for the year after OPEC+ curbed supplies, though prices have declined from a peak earlier this month on signs of poor demand in top importer China. The country recorded its slowest growth in five quarters in the three months to June, and the International Energy Agency has cited the Asian nation’s slowdown as a big factor in weaker global oil demand growth.
With some traders still upbeat on the outlook for the rest of the year, a flurry of bullish oil options traded on Tuesday. Those included contracts that would profit from a rally to $100 and beyond for WTI and Brent.
