Oil steadied, after four days of declines, as traders weighed potential risks to production in the Middle East, while another China economic briefing left investors underwhelmed. Brent (BZ=F) held above $74 a barrel, after losing almost 7% over the prior four sessions, while West Texas Intermediate (CL=F) neared $71. After advancing in early trade, Brent pared gains, in line with other commodities, during a housing-policy brief in China in which announced stimulus fell short of market expectations.
Both benchmarks slid earlier in the week after reports that Israel would avoid strikes on Iran’s crude facilities in retaliation for an Oct. 1 attack. In the Middle East, US stealth bombers hit weapons storage sites linked to Iran-backed Houthi rebels in Yemen, Israel stepped up air strikes on Lebanon, and an oil leak near a key terminal in Iran heightened attention on the OPEC member’s export facilities.
“While geopolitics continue to cloud the fundamental judgment of investors, underwhelming signals from China will limit any substantial reversal in bearish trends,” said Priyanka Sachdeva, a senior market analyst at brokerage Phillip Nova Pte in Singapore.
Oil prices have been buffeted this month as concerns over the conflict in the Middle East, which supplies about a third of the world’s crude, were pared by increasing bearish signals. Rising production from outside OPEC and sluggish demand growth will lead to a “sizable surplus” next year, barring any major disruption to flows, the International Energy Agency said this week.
Meanwhile, an industry group reported US crude stockpiles fell 1.6 million barrels last week. That would be the first decline in three weeks if confirmed by official data later Thursday.
