Oil steadies near 7-year high as Biden vows to curb inflation

Oil steadied near the highest close since 2014 after President Joe Biden pledged to continue trying to lower prices and an industry report pointed to a modest increase in U.S. crude stockpiles.

Futures in New York traded near $87 a barrel after advancing almost 6% over the past three sessions. While Biden does have some options to address the increase in oil prices, many of them would be limited and likely short-lived. Crude’s rally poses a challenge for consuming nations and central banks as they try and stave off inflation while supporting economic growth.

The American Petroleum Institute reported U.S. crude inventories rose by 1.4 million barrels last week, according to people familiar. That would be the first gain in eight weeks if confirmed by official data later Thursday.

Oil has rallied around 30% since the end of November as stronger than expected demand and supply outages tightened the market, leading to buyers in Asia paying sharply higher premiums for spot cargoes. Goldman Sachs Group Inc. is forecasting a return to $100 crude in the third quarter, and the International Energy Agency said that demand is on track to hit pre-pandemic levels.

“Oil is a bit overheated,” said Suvro Sarkar, an energy analyst at DBS Bank Ltd. in Singapore, adding that there’s little President Biden can do on a political level to ease prices.

Biden told reporters on Wednesday that the administration would work on trying to increase supplies that are available, adding that it would be hard. That followed comments on Tuesday that the administration was working with oil-producing countries to ensure supply rises to meet demand.