Oil held gains near the highest level in almost nine months as concerns over a possible escalation in hostilities between Russia and Ukraine overshadowed the first gain in US crude stockpiles in four weeks.
West Texas Intermediate futures traded above $84 a barrel after climbing 3% over the previous two sessions. There’s heightened tension between Kyiv and Moscow after a Ukrainian drone attacked a Russian-flagged oil tanker over the weekend in the Black Sea, a key waterway for the nation’s exports.
While US government data showed crude inventories rose by almost 6 million barrels last week, investors instead focused on shrinking gasoline and distillate stockpiles, which each declined the most in three months.
Oil has rallied since late-June as Saudi Arabia and Russia pledged supply curbs, although headwinds still persist including a sluggish economic recovery from China. OPEC will release its monthly market report later Thursday, providing investors with a snapshot of the market.
Closely-watched measures of oil-market health have also strengthened, with the nearest timespreads for WTI and global benchmark Brent leaping into larger backwardation — a structure that indicates scarcer supply.
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