(Bloomberg) — Oil fell from the highest level in seven years as China unleashed measures aimed at stabilizing its power supplies for the winter, while a U.S. industry report pointed to an increase in crude stockpiles.
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Futures in New York fell toward $82 a barrel amid a broader drop in raw materials including aluminum and copper. China is studying ways to intervene in the coal market to ensure reasonable prices, while the nation’s energy watchdog hosted a Tuesday meeting with refiners after oil prices soared.
The American Petroleum Institute reported crude inventories rose by 3.29 million barrels last week, according to people familiar. That would be a fourth weekly gain if confirmed by official government data later Wednesday.
Oil has rallied to the highest level since 2014 as an energy crunch — prompted by coal and natural gas shortages — coincided with rebounding demand from economies recovering from the pandemic. Russia is signaling that it won’t go out of its way to offer Europe extra gas to ease the crisis unless it gets regulatory approval to start flows through the Nord Stream 2 pipeline.
“A spillover from the gas market is still moving the oil market more than its fundamentals,” said Suvro Sarkar, an energy analyst at DBS Bank. Oil prices are likely to remain strong amid tight supplies during winter, he added
See also: Key U.S. Oil Spread at Widest Since 2013 on Energy Crisis: Chart
The meeting between China’s National Energy Administration and oil refiners was meant to facilitate an exchange of views and help regulators stay abreast of market developments, said people with knowledge of the matter, adding that it ended without any policy decision.
See also: Here’s How Asian Refiners Are Ramping Up as Energy Crisis Hits
U.S. gasoline and distillate stockpiles — a category that includes diesel — both declined last week, the API said. The median estimate in a Bloomberg survey forecast the Energy Information Administration will report nationwide crude inventories increased by 2 million barrels.
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