(Bloomberg) -- Oil held steady as investors weighed signs of an improving demand outlook in some regions against the prospect of more crude supply flowing from Iran.
Futures in New York traded near $66 a barrel, little changed for a second day. An industry report showed lower U.S. inventories ahead of the summer driving season. Meanwhile China is poised to buy more cheaper crude from Russia, its appetite growing as the nation leads an uneven Asian recovery in consumption.
World powers are conducting their fifth round of talks to revive a nuclear agreement with Iran that could pave the way for a lifting of sanctions. That may unleash a flood of Iranian barrels stashed on tankers at sea.
After selling off last week on the prospect of renewed supply from Iran, crude has recovered in recent days. There are signs of healthy demand in the U.S., China and Europe, despite parts of Asia facing a comeback of Covid-19. A key gauge in the American physical market is signaling that traders are bracing for a potential supply crunch ahead of the busy U.S. summer driving season.
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“Thanks to the good sentiment on the financial markets, the price momentum suggests that Brent will make a renewed bid for the $70-per-barrel mark in the next few days,” said Eugen Weinberg, head of commodities research at Commerzbank AG.
The American Petroleum Institute reported that U.S. gasoline stockpiles fell by almost 2 million barrels last week, while crude inventories slid by 439,000 barrels, according to people familiar with the data. Official government figures are due later on Wednesday.
© 2021 Bloomberg L.P.
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