Oil inched higher, aided by gains across markets as China sought to stimulate its economy, and ahead of U.S. inventory data due later.

Global benchmark Brent edged toward US$80 a barrel though it remains steadfastly rangebound. The government in Beijing planned measures to unleash more money to boost growth, while equities broadly gained. The U.S. dollar fell, making commodities priced in the currency more attractive.

The industry-funded American Petroleum Institute reported that nationwide U.S. stockpiles declined by almost seven million barrels last week, including a drop at the key hub at Cushing, Oklahoma. Official figures are due later on Wednesday.

Oil has been confined to a narrow range this month, with geopolitical risks — notably turmoil in the Middle East — countered by expectations of increasing supplies from producers outside of the Organization of Petroleum Exporting Countries. Major crude trader Gunvor Group Ltd. said the opening half of the year would be dominated by non-OPEC output growth that will eventually plateau, with markets remaining stagnant.

“The impact of geopolitical risk has so far been limited in a market which many traders think will remain heavily oversupplied past January,” Standard Chartered analysts including Paul Horsnell wrote in a note. “If the usual seasonal swing up in demand serves to lessen the bearish consensus, we would expect to see geopolitics have a more magnified effect on prices.”

Traders are assessing the latest U.S.-led strikes intended to halt vessel attacks by Iran-backed Houthis in Yemen. Early Tuesday, Central Command hit two anti-ship missiles aimed into the Red Sea. Elsewhere, U.S. forces carried out airstrikes on a Tehran-backed militia in Iraq.

Prices:

• Brent for March settlement added 0.4 per cent to $79.87 a barrel at 10:06 a.m. in London.
• WTI for March delivery was up 0.5 per cent at $74.77 a barrel.