Oil steadies after mixed US stockpile report signals weak demand

Oil was steady after its first drop in three sessions as signals that US fuel demand may be lagging overshadowed a disruption to shipments from a key port in Turkey.

West Texas Intermediate traded near $73 a barrel after closing 0.3 per cent lower on Wednesday. US government showed crude inventories fell the most this year last week but demand for distillates — a category that includes diesel — continued to languish at the lowest seasonal level since 2016, a sign of a lackluster economy.

Crude remains on track for its fifth monthly drop as recessionary concerns, a banking crisis and resilient Russian output weighed on oil.

Prices rallied at the start of this week after a dispute between Iraq, Turkey and Kurdish authorities halted around 400,000 barrels a day of exports from the Ceyhan port.

Most market watchers are still betting on China’s recovery underpinning a rally in prices later this year, and comments from two of the nation’s oil majors painted an optimistic outlook.

PetroChina and Cnooc both said a rebounding domestic economy can help cushion the impact of slower global growth.

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