Oil extended its volatile run as continued US efforts to curb prices and concerns over a global recession counter signs of tight supply. 

West Texas Intermediate futures traded close to $84 a barrel on Wednesday. Prices have been oscillating within a narrow band since late-September amid fluctuating risk sentiment in broader markets. The mixed picture is also showing in the shape of the futures curve -- while key timespreads are indicating supply restraints, several gauges have softened to the weakest levels since late September in recent days.

“Liquidity and risk deployment is low and investor positioning has been subdued,” RBC Capital Markets analysts including Michael Tran and Helima Croft said in a note to clients. “Global inventories remain tight, but the global macro backdrop is arguably the weakest in a decade.”

Meanwhile, the Biden Administration has once again turned its attention to high gasoline prices and low diesel supplies that will pinch American consumers this winter. A release of 15 million barrels from the nation’s strategic reserve is the final tranche from a program the White House began in the spring. While the US may consider more strategic crude releases this winter, curbing refined product exports will not be announced anytime in the near future. 

Crude has pulled back from its recent highs, with the market remaining caught between the twin forces of production cuts by the Organization of Petroleum Exporting Countries and its allies alongside the looming threat of a major slowdown in global growth. Meanwhile forthcoming European Union sanctions on Russian oil exports could send shockwaves through the global tanker market, and have already caused some Indian refiners to halt spot purchases before the latest sanctions take effect early December. 

The American Petroleum Institute reported gasoline inventories increased over 7 million barrels last week, according to people familiar with the data, which also showed lower crude holdings. Official figures come later on Wednesday.

The EU’s eighth round of sanctions could end up affecting a swath of tankers. It states that if a vessel owner transports Russian crude above an agreed price threshold, their ship would be banned from getting EU services needed to ship the commodity, such as insurance, “in the future.”

Adding to supply concerns, the restoration of full oil output at the Kashagan field in Kazakhstan has been delayed as the operator keeps working on a solution to a gas leak, people familiar with the matter said. Kazakhstan is Central Asia’s largest producer and one of the main alternatives to Russian crude for European buyers.

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