Oil holds onto gains after 5-day rally

Oil held on to gains after a five-day rally, weighed down by falling U.S. inventories and speculation that OPEC+ leaders will extend supply cuts. U.S. crude traded above $81 a barrel after rising 3.5 percent in its longest daily gain since March. U.S. inventories fell by 10.6 million barrels last week, the lowest since December. Stocks in the key hub of Cushing, Oklahoma, also fell to their lowest since January. Saudi Arabia was widely expected to extend its 1 million-barrel-a-day supply cuts through October, according to a Bloomberg survey of 25 investors and analysts. Russia also said it was discussing with its OPEC+ partners the possibility of extending crude export cuts into the same month, although no decision has been made. The worsening China outlook and the Fed’s monetary tightening campaign have been countervailing, offset by supply curbs imposed by the Organization of the Petroleum Exporting Countries and allies including Moscow. “We see upside risks to our forecast that Brent crude futures will average $85 a barrel in the fourth quarter,” said Vivek Dhar, director of mining and energy commodities research at Commonwealth Bank of Australia. He said U.S. inventories were expected to remain below the five-year average as the market shifted into deficit.