(Bloomberg) -- Oil held above $85 a barrel after industry estimates showed a draw in U.S. stockpiles and investors tracked tensions over Ukraine.
West Texas Intermediate edged lower in early Asian trading after rallying almost 3% on Tuesday. The American Petroleum Institute reported U.S. crude stockpiles shrunk by 875,000 barrels last week, according to the people familiar with the data. If that’s confirmed by government figures due later Wednesday, it would be the eighth decline in the past nine weeks.
President Joe Biden said he would consider personally sanctioning Vladimir Putin if he orders an invasion of Ukraine, escalating the U.S. effort to deter the Russian leader from war. A potential conflict carries enormous risks for financial markets, especially energy commodities including gas and oil.
Crude is having a volatile week, losing more than 2% on Monday, then rebounding. Prices remain close to a seven-year high on prospects for a continuation of the strong revival in demand from the pandemic. A string of Wall Street banks including Goldman Sachs Group Inc (NYSE:GS). have forecast oil will hit $100 a barrel this year.
Also in focus Wednesday is the Federal Reserve’s first policy-setting meeting of the year. Officials are expected to reaffirm their commitment to containing roaring inflation by ending stimulus and raising interest rates over 2022.
On Tuesday, the Biden administration pressed on with its effort to contain oil and gasoline prices with a loan of 13.4 million barrels of crude from its strategic reserve. The awards were part of a previously announced move.
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