Oil Gains as Risk-On Sentiment Outweighs Rising Stockpiles - Yahoo Finance

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(Bloomberg) -- Oil jumped alongside broader equity markets, with traders embracing risk assets and largely overlooking a bearish US stockpile report.

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West Texas Intermediate settled above $70 a barrel, jumping more than $2 on Thursday. Oil traders brushed off data that showed US crude stockpiles rose by more than 4 million barrels last week and inventories in Cushing, Oklahoma, the nation’s largest storage hub, rose for a sixth week.

Instead, oil rallied as equities surged and the dollar fell on speculation that the Federal Reserve will be able to pause its interest-rate hikes this month.

Crude prices have dropped around 13% this year amid concerns about aggressive monetary tightening in the US and China’s lackluster economic recovery. A private survey showed a slight expansion of Chinese manufacturing activity in May, a surprise improvement that contradicted official data released earlier this week.

Traders will be looking ahead to an OPEC+ meeting over the weekend in Vienna to discuss the group’s production policy. The 23-nation OPEC+ alliance faces a divided oil market when it convenes June 4. Brent crude prices dropping to $70 or below would create a 60% to 70% likelihood of a production cut by some members, Citi analysts including Ed Morse said in a note.

When asked if the group will make additional cuts, Azerbaijan Energy Minister Parviz Shahbazov told reporters in Baku that he didn’t know.

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