Oil holds gains in early Thursday trade

Oil held its gain and prices remained within a narrow range while worries about weak demand were offset by indications of a tightening crude market, as per a Bloomberg report.

Brent crude was up by 0.45 per cent, or 0.37 cents trading at $83 a barrel after closing 0.8 per cent higher on Wednesday. While the US West Texas Intermediate climbed by 0.50 per cent, or 0.39 cents, to stand at about $78 a barrel.

Time-spreads indicate a tightening market, although US crude stockpiles have significantly increased, according to the industry-funded American Petroleum Institute. On Thursday, official data is expected.

Moreover, due to the lack of new promoters for the oil market, futures prices have frequently followed the movements of the global equity markets, which are impacted by changes in earnings and the release of economic data.

Crude is currently trading close to the upper end of the year’s range as investors balance growing geopolitical risks in the Middle East and disruptions in the Red Sea with a bleak demand outlook from China, the top importer.

According to US Federal Reserve meeting minutes, the majority of officials are still concerned about the possibility of lowering borrowing costs too soon, which would hurt the demand.