Oil futures swung to a higher close Thursday as a selloff in equity markets eased and investors kept an eye on plans to ease COVID restrictions in Shanghai.
West Texas Intermediate crude for June delivery
rose $2.62, or 2.4%, to close at $112.21 a barrel on the New York Mercantile Exchange. July WTI
the most actively traded contract, gained $2.89, or 2.7%, to finish at $109.89 a barrel.
June natural-gas futures
declined 0.7% to $$8.308 per million British thermal units.
Crude was under pressure in early trade after oil and other energy futures fell Wednesday despite data that showed an unexpected fall in U.S. crude inventories and a larger-than-expected drop in already tight gasoline stocks —- a move analysts said likely reflected selling in response to a rout in the equity market.
But crude shook off the early pressure to turn higher, as losses for U.S. indexes moderated in Thursday’s session and traders highlighted a tight supply backdrop.
“Still, what remains true across global markets is that inventories are low, particularly for products, which continues to offer price support to refined product prices over the near-term,” said Robbie Fraser, manager of global research and analytics at Schneider Electric, in a note.
”That challenge is likely to persist as Northern Hemisphere summer travel demand is poised for a boost to gasoline, diesel , and jet fuel demand over the weeks and months ahead. To counter this, the latest data shows US refiners responding with higher run rates, but any normalization of inventory levels will take time,” he said.
Crude had found support earlier in the week as China began to loosen its lockdown of Shanghai. China’s COVID-19 lockdowns have undercut demand from the world’s largest oil importer.
Shanghai will reopen four of its 20 subway lines Sunday as it slowly eases pandemic restrictions that have kept most residents in their housing complexes for more than six weeks. The city will also restart 273 bus lines connecting major urban centers, airports, train stations and hospitals as it resumes cross-district public transit, Yu Fulin, director of the Shanghai Transport Commission, said at a daily pandemic briefing Thursday.
The Energy Information Administration said natural gas in storage rose 89 billion cubic feet, or Bcf, last week. Analysts surveyed by S&P Global Commodity Insights had forecast an injection into storage of 87 Bcf.
Stocks were 358 Bcf less than last year at this time and 310 Bcf below the five-year average of 2,042 Bcf, the EIA said.
—-The Associated Press contributed to this article.