Oil extends volatile run as tight supply vies with growth woes

Oil extends volatile run as tight supply vies with growth woes

Oil switched between gains and losses as investors continued to weigh a tight market against concerns over a global economic slowdown.

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West Texas Intermediate surrendered earlier gains to trade near $85 a barrel. Crude remains within the wide range it has been trading in for the last month, and turned lower on Tuesday as the dollar pared an earlier decline. The US is moving toward releasing further barrels from its strategic oil reserve in order to bolster supply.

Crude’s choppy trading in October has seen the market caught between two divergent factors. Key time spreads are signaling tightness before OPEC+ output cuts from November, but bearish drivers such weak Chinese demand and aggressive monetary policy from central banks continue to drag on the market.

Prices have fallen by around a third since early June, erasing all the gains made after Russia’s invasion of Ukraine. European Union sanctions on Moscow’s oil trading are set to take effect from December, prompting traders and refiners to book storage tanks in anticipation of a supply crunch.

“Volatility remains high as traders appear more focused on geopolitical and policy risks rather than supply fundamentals, said Ashley