(Bloomberg) -- Oil rebounded after posting the biggest slump in almost two weeks as traders weighed the outlook for global energy demand, and an industry report pointed to a drop in the U.S. stockpiles.
West Texas Intermediate rose toward $104 a barrel in early Asian trading after tumbling by more than 5% on Tuesday. That drop came after the International Monetary Fund slashed its forecast for world economic growth following Russia’s invasion of Ukraine and amid renewed virus lockdowns in China.
The industry-funded American Petroleum Institute reported that U.S. crude stockpiles declined by about 4.5 million barrels last week, according to people familiar with the data. If confirmed by government figures due Wednesday that would be the biggest decline in nationwide holdings since early February.
Oil rallied to the highest level since 2008 last month in the initial aftermath of Moscow’s invasion. Since then, crude has seen volatile trading as investors gauge moves by the U.S. and U.K. to ban Russian imports, as well as the impact of major releases from strategic reserves. Supply outages have also roiled prices, with protest-driven disruptions in Libya the latest to hit the market.
There’s mounting pressure on the European Union to bar Russian crude too, with support for the move from France. A full and immediate ban could displace more than 4 million barrels a day and propel Brent prices to a record $185 a barrel, according to a forecast from JPMorgan Chase & Co (NYSE: JPM ).
©2022 Bloomberg L.P.
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