Oil was steady in Asia after declining almost 2% on Thursday ahead of a report from the International Energy Agency that will provide a snapshot on the market that’s tightening due to supply curbs.
West Texas Intermediate traded near $83 a barrel and was on track to end the week little changed. Global markets are heading for a sharp supply deficit of more than 2 million barrels a day this quarter as Saudi Arabia slashes output, according to a monthly report from OPEC on Thursday.
Oil has rallied since late-June on the cuts from Saudi Arabia, aided by export curbs from OPEC+ ally Russia, but China’s lackluster economic rebound still presents a significant headwind. Meanwhile, the US Federal Reserve is likely to leave interest rates unchanged after inflation showed signs of easing.
The tightness is flowing through to downstream fuel markets, with a type of petroleum left over from oil refining costing more than crude in Europe for the first time in decades. Prices of gasoline and diesel are also well above seasonal norms, partly as a result of refinery output curbs.
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