Oil prices edged upward, reaching a seven-week high, as investor optimism driven by rising equity prices outweighed concerns about increasing stockpiles. Brent crude peaked at $85.78 per barrel, the highest since May 1, while West Texas Intermediate neared $82 per barrel. The S&P 500’s new record on Tuesday bolstered a strong recovery in oil prices, aided by technical traders following market trends.
The American Petroleum Institute reported a 2.26 million barrel increase in US crude inventories last week, according to sources familiar with the figures. If confirmed by official data, this would mark the third consecutive rise. Stockpiles at the Cushing, Oklahoma hub also grew, according to the API.
Oil has rebounded from losses earlier in the month when OPEC+ hinted at potentially increasing supply, a plan they later clarified was conditional. Key timespreads have expanded, indicating stronger near-term demand, while Asian refiners are restoring some capacity post-maintenance despite weak margins, thus boosting crude consumption.
“There are implicit signs that refiners are preparing for the summer season,” said Tamas Varga, an analyst at brokerage PVM. “Front-month Brent is more than $8 a barrel above the post-OPEC+ meeting trough, indicating genuine optimism that the global oil balance will eventually tighten.”
However, with the recent surge in oil prices over the past two weeks, there are indications that futures may be nearing overbought levels. Brent’s relative strength index on a nine-day basis has surpassed 70, suggesting a potential pullback.
Trading volumes in oil futures are expected to be lower on Wednesday due to a US holiday.
Featured Image: Freepik
