Riyadh: Oil trimmed earlier gains as Saudi Arabia slashed its crude prices, signaling tepid demand, and risk-off sentiment clipped broader markets.
West Texas Intermediate traded near $73 a barrel, trading in over a $2 range. State-controlled Saudi Aramco cut crude prices to its main market Asia and Europe, a signal that demand remains sluggish as coronavirus cases in China surge. Crude also was restrained as equities fell and the dollar strengthened after a strong US labor report fuelled speculation that interest rates have more room to rise.
Crude inventory figures later Thursday will give a first insight into the impact of pre-Christmas cold weather on US stockpiles, after the American Petroleum Institute reported a build on Wednesday.
Crude is off to a gloomy start to the year with futures curves continuing to signal a market that is oversupplied. At the same time, the oil market is also grappling with lower levels of participation. Open interest remains near multiyear lows, leaving prices susceptible to large intraday swings.
The industry-funded API reported US commercial crude stockpiles expanded by 3.3 million barrels last week, according to people familiar with the figures. Gasoline inventories also increased, but supplies of distillates “- a category that includes diesel “- shrank.
