LONDON: Oil prices were steady on Tuesday, hovering near three-month highs as signs of tighter supplies and pledges by Chinese authorities to shore up the world’s second-biggest economy lifted sentiment, while weaker Western economic data weighed.
Brent futures were unchanged at $82.74 a barrel by 1207 GMT, while U.S. West Texas Intermediate (WTI) crude was up 1 cent, or 0.01%, at $78.75.
The crude benchmarks have already chalked up four weekly gains in a row, with supplies expected to tighten due to output cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allies.
Earlier-loading Brent contracts are selling above later loadings, a price structure known as backwardation indicating traders see tight supply, with the six-month spread near a two-and-a-half month high.
“On the supply side, whilst remote for now, risks are growing following Russia’s escalation and bombing of Ukrainian port infrastructure along the Danube River,” ING said in a note saying attacks on grains assets could spill into energy markets.
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“The market is starting to become a little nervous over a potential supply disruption.”
In China, the world’s second-biggest oil consumer, leaders pledged to step up economic policy support. In the euro zone, business activity shrank more than expected in July, a survey showed.
In the United States, business activity slowed to a five-month low in July, a closely watched survey showed, but falling input prices and slower hiring indicate the Federal Reserve could be making progress on its bid to reduce inflation. Markets anticipate 25-basis-point rate hikes from both the Fed and the European Central Bank this week.
U.S. industry data on inventories is expected at around 2030 GMT. Four analysts polled by Reuters estimated on average that crude inventories fell by about 2 million barrels in the week to July 21.
Sending a bearish signal, a 110,000 barrel-per-day unit at the huge U.S. refinery in Baton Rouge will be shut for up to four weeks, sources said.
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