(Bloomberg) -- Oil rose after the biggest one-day drop this year as traders focused on the still-positive demand outlook and appetite for risk rebounded.
West Texas Intermediate climbed almost 1% in early Asian trading after ending more than 2% lower on Monday, when U.S. equities swooned then recovered. The volatile trading comes as the Federal Reserve prepares the ground for interest-rate increases, and Russian troops mass on the border with Ukraine.
Crude rallied to a seven-year last week as worldwide consumption recovered from the impact of the pandemic, draining stockpiles. U.S. oilfield services giant Halliburton (NYSE: HAL ) Co. said that it expected the industry environment to remain supportive as it reported a surge in profit and a higher dividend on Monday.
A Russian invasion of Ukraine would potentially have widespread implications for energy and commodities markets, including oil. The risk of that happening in the next few weeks is more than 50%, according to RBC Capital Markets analyst Helima Croft.
U.S. crude stockpiles are headed for another monthly drop in January after contracting by 15% in 2021. The industry-funded American Petroleum Institute will release its latest weekly estimate of nationwide oil inventories on Tuesday, as well as key products including gasoline.
©2022 Bloomberg L.P.
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