Crude Oil Near Seven-Year High as U.S. Crude Stockpiles Grow

Latest data on Wednesday shows that oil steadied and near a seven-year high in Asian trading after an industry report pointed to expanding U.S. crude and fuel stockpiles.

Futures in New York traded near the $79 per barrel after reaching almost 6% over the past four sessions. American Petroleum Institute reported oil inventories climbed close to 1 million barrels last week, according to people familiar. If confirmed by government data Wednesday, it would be a second weekly gain.

Based on previous data, oil has rallied to the highest level since 2014 as the market tightened due to global economic recovery, and as surging natural gas prices spurred greater demand for crude and oil products ahead of winter. OPEC+ stuck with a gradual increase in supply this week, despite the worsening energy crunch.

Kim Kwangrae, senior commodities analyst at Samsung Futures Inc. said that “The tight supply outlook and the extra oil demand coming from countries in Europe and Asia in search of alternative fuels due to the global energy crunch have pumped up prices.” “Oil at $80 will become a psychological burden for some investors, potentially driving a sell-off if the American government data shows crude inventories have climbed as per expectations.”

Bloomberg news says that the prompt time spread for Brent was 74 cents a barrel in backwardation -- a bullish structure where near-dated contracts are more expensive than later-dated ones. That compares with 78 cents on Monday.

U.S. gasoline stockpiles rose by around 3.7 million barrels last week, while distillate inventories -- a category that includes diesel -- grew by 345,000 barrels, the API reported. Crude supplies at the key storage hub at Cushing, Oklahoma, increased by 2 million barrels.