Global benchmark Brent traded above $85 a barrel, and is up around 2.5% since the close on Wednesday. Supply curbs from OPEC+ linchpins Russia and Saudi Arabia have driven a rally since late June, while US crude stockpiles have shrunk to the least since January.
But growing indications of economic malaise in China — ranging from downbeat consumers to struggling exports — and stubbornly persistent inflation risks in the US saw oil fall last week. Chinese banks made a smaller-than-expected cut to their benchmark lending rate on Monday and avoided trimming the reference rate for mortgages, despite the central bank putting pressure on lenders to boost loans.
The annual Jackson Hole symposium in Wyoming on Thursday and Friday, which features speakers including Federal Reserve Chair Jerome Powell, may provide clues on the direction of interest rates. More increases in borrowing costs may be coming in the US after minutes of the Fed’s July meeting showed officials remained concerned about the inflationary threat.
Meanwhile, some refined products such as diesel — the workhorse fuel of the global economy — have started pricing in scarcity this winter, boosting their premium to the oil from which they are made. Gasoline futures in New York have risen by 15% this year, also outpacing crude.Most Read from Bloomberg Businessweek