Oil steadies near 2-week high as markets digest mixed inventory data

Investing.com– Oil prices moved little in early Asian trade on Thursday, sticking near two-week highs as markets gauged mixed signals on U.S. crude inventories, while also awaiting more cues on monetary policy from the Federal Reserve.

Crude markets saw a strong run-up this week as interest rate cuts in China sparked some bets on a recovery in demand later this year. A surge in broader commodity markets also fueled bets on tighter oil supplies.

Weakness in the dollar somewhat aided crude after Fed Chair Jerome Powell presented a less hawkish stance than some were expecting during a Senate testimony. Powell is now set to later in the day, providing more cues on monetary policy. 

rose 0.2% to $77.07 a barrel, while were flat at $72.48 a barrel by 21:40 ET (01:40 GMT). Both contracts were close to their strongest levels in two weeks.

U.S. inventories seen shrinking, but gasoline stockpiles rise 

Data from the (API) showed on Wednesday that overall U.S. oil inventories saw a bigger-than-expected drawdown in the week to June 16, reflecting some strength in U.S. crude demand.

But the API data also showed that gasoline inventories likely grew for a third straight week, indicating that U.S. fuel demand remained muted despite the onset of the travel-heavy summer season. inched lower after the reading. 

The API data usually heralds a similar trend in official due later on Thursday. Both readings were delayed this week on account of the Juneteenth holiday.

The EIA reading is expected to show a build of about 1.9 million barrels in the past week, after a bumper 7.9 million barrel build through the week to June 9. are also expected to have grown. 

Fed remains in focus ahead of Powell testimony 

Oil markets also remained largely focused on a testimony before the Senate Banking Committee by Fed Chair Jerome Powell later in the day, for more cues on the path of interest rates.

Powell told the House Financial Services Committee that relatively high U.S. inflation was likely to invite more rate hikes from the central bank, although he did not specify whether rates would rise in July.

Still, markets are . Rising interest rates have weighed on oil prices this year by brewing concerns over worsening economic conditions, which could dent crude demand. 

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