MARKET NEWS

BY Yongchang Chin and Alex Longley

(Bloomberg) -- Oil gained as the US cut its forecast for global oversupply while traders continued to assess the wider outlook for economic growth after a recent slump in equities.

Brent crude rose around $70 a barrel after a modest gain on Tuesday, while West Texas Intermediate was just below $67. The Energy Information Administration slashed its prediction for a surplus for this year and halved its outlook for a glut in 2026, citing the prospect of diminished flows from Iran and Venezuela.

Crude recouped early losses on Tuesday even as fresh trade salvos from US President Donald Trump threatened to prolong a plunge in risk assets. Futures have fallen from a high in mid-January on the chaotic rollout of tariffs, OPEC+ plans to add supply and weakening demand in China.

“If we now get an equity market rebound, then we are likely to get an oil price rebound as well since that is what seems to hold back the Brent crude oil price at the current level,” said Bjarne Schieldrop, chief commodities analyst at SEB AB.

Elsewhere, the industry-funded American Petroleum Institute reported that US nationwide commercial inventories rose 4.2 million barrels last week, though a big draw was seen at the storage hub in Cushing, Oklahoma. That would be the first reduction at the delivery point for WTI in five weeks, if confirmed by official data later on Wednesday.

Geopolitical concerns remain front and center. Ukraine has accepted a US proposal for a 30-day truce with Russia that raises the possibility of a pause of hostilities in the three-year-old war. Meanwhile, the Iran-backed Houthis in Yemen said they would immediately resume attacks on Israeli ships for the first time in about two months.

--With assistance from Rob Verdonck.