Oil steadies near two-month low as US stockpiles climb, equity rout eases

Oil steadied near the lowest level in two months as a rout in global equity markets abated.

Futures in New York fell 0.2 per cent, paring earlier decline of as much as 1.2 per cent. The Stoxx Europe 600 index increased, while futures on the S&P 500 Index advanced after an earlier rout wiped out all of the U.S. index’s gains for this year. Meanwhile, a government report on Wednesday showed American crude stockpiles climbed more than expected, rising for a fifth week.

Oil is poised for the worst monthly decline since July 2016 as ongoing trade tensions stoke concerns over global energy demand at a time American crude stockpiles are increasing. Traders are also closely watching how much Iranian oil will be removed from the market when U.S. sanctions hit next month and whether the Organization of Petroleum Exporting Countries and its allies are willing -- and able -- to fill the gap.

“The sentiment in other asset classes is very much looked at, and it seems that the market is trying to find a bottom around current levels,” said Hans van Cleef, senior energy economist at ABN Amro Bank NV. “There needs to be a driver which can push prices up again and Iran sanctions kicking in might be one of them.”

West Texas Intermediate for December delivery declined as much as 83 cents to $65.99 a barrel on the New York Mercantile Exchange, and was at $66.68 at 11:37 a.m. in London. The contract rose 39 cents on Wednesday. Total volume traded was in line with the 100-day average.

Brent for December settlement fell 6 cents to $76.11 a barrel on the London-based ICE Futures Europe exchange, after declining 27 cents on Wednesday. The global benchmark traded at a $9.44 premium to WTI.

Equities in Europe rose after Asian gauges fell for a third day. Futures on the S&P 500 Index advanced, with positive results from Tesla Inc. brightening the mood. The Stoxx Europe 600 Oil & Gas index gained after three days of declines.

In the U.S., nationwide crude inventories climbed by 6.35 million barrels last week for the longest streak of gains since March 2017, the Energy Information Administration reported on Wednesday. That compares with the median 3.7 million-barrel increase forecast in a Bloomberg survey.