Oil prices rose to an eightweek high on Wednesday as U.S. crude exports plunged and on signs of a speedy economic recovery and upbeat forecasts for energy demand.
Three asset classes that will help you beat the inflation heat or at best help you hedge the growing risk at a time when global inflationary pressures are looming as major economies recover from the COVID-19 pandemic.
(Bloomberg) -- Oil edged lower after a four-day gain as a key U.S. pipeline restarted, and traders assessed signs a global glut has been drained.West Texas Intermediate fell 0.6%, after closing Wednesday at a two-month high, and Brent dropped. The Colonial Pipeline -- a key source of gasoline for the East Coast -- is returning to service after a cyberattack Friday. That’ll bring relief to motorists after panic-buying emptied out some gas stations.A U.S. government report showed domestic crude inventories fell to the lowest since late February last week, adding to signs of market rebalancing. On Wednesday, the International Energy Agency said the world has now largely worked off the surplus that accumulated when the pandemic routed demand.Oil has surged this year, joining a broad rally in commodities, as investors wager that the economic recovery from the coronavirus outbreak will spur energy consumption. The roll-out of vaccines in the U.S., Europe and China has allowed governments to pare back social-distancing measures, permitting a return to work and much greater mobility. Still, Covid-19 flare-ups in many parts of Asia, including India, have complicated the global picture.Against the backdrop of improved worldwide demand, rising prices, and lower stockpiles, the Organization of Petroleum Exporting Countries and its allies have been cautious in easing the deep supply cuts imposed last year. At the same time, U.S. shale producers have eschewed moves to rapidly boost output.The U.S. economy is rapidly reopening and a robust summer driving season is expected, underpinned by pent-up demand. On Wednesday, data showed consumer prices surged in April by the most since 2009, topping forecasts and intensifying a debate about how long inflationary pressures will last.Brent’s prompt timespread was 17 cents a barrel in backwardation. While that remains a bullish pattern -- with near-term prices above those further out -- it has dropped to the lowest level since late March.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.