Oil Dips as Slowdown Concerns Counter Shrinking US Stockpiles

(Bloomberg) — Oil fell as concerns over an uneven demand recovery and the prospect of further monetary tightening offset signs of shrinking stockpiles.

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West Texas Intermediate slid toward $80 a barrel after closing little changed Tuesday. The recovery in fuel consumption has been uneven as Asia grapples with a flood of Russian oil into an already well-supplied market. Refiners in the region are mulling run cuts as profits from turning crude into products such as diesel plunge, while timespreads for benchmark Dubai grade weakened.

“There still appears to be some concerns over the broader demand outlook and weaker refinery margins will only be adding to these concerns,” said Warren Patterson, the head of commodities strategy for ING Groep NV in Singapore. “Oil prices have remained fairly rangebound.”

Crude recently rebounded after tumbling to a 15-month low in mid-March following turmoil in the banking sector. A surprise announcement by OPEC+ on production cuts and curbed Iraqi flows have underpinned some of the gains, although exports from Iraq’s Kurdistan region could resume this week.

The American Petroleum Institute reported crude inventories at the storage hub at Cushing, Oklahoma, dropped again last week, according to people familiar with the data. If confirmed by government figures later Wednesday, it will be the longest run of declines in more than a year.

A widely-watched economic survey from the Federal Reserve is also scheduled to be released later Wednesday and will provide further insight on the health on the US economy, along with the path of monetary policy.

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