(Bloomberg – Oil was stable after closing at a record three-month high. Investors were assessing the outlook of supply and demand, as US summer driving season intensifies and China recovers from its virus lockdown.

After settling 0.8% lower on Tuesday, West Texas Intermediate futures reached $119 per barrel. According to those familiar with the data, American Petroleum Institute reports that US gasoline inventories rose by 1.82million barrels over the past week. That’s unlikely to provide much relief to a tight fuel market, with inventories at the lowest seasonal level in nine years.

The oil market has maintained its upward momentum this year as economies rebounded from the pandemic, although Russia’s invasion of Ukraine and a virus resurgence in China has led to extreme volatility at times. Beijing keeps easing its Covid regulations as the infection rate decreases.

Russia’s war in Ukraine has fanned inflation, driving up the cost of food to fuels. Treasury Secretary Janet Yellen said that the US is actively involved in talks about a potential oil-buyers’ bloc designed to keep Russian crude on global markets, but at the same time limit revenues flowing to the country.

“Oil remains well supported on dips right now,” said Jeffrey Halley, a senior market analyst at Oanda Asia Pacific Pte. “With China reopening, higher prices remains the path of least resistance.”

The API reported that crude oil stockpiles in the US rose by 1.85million barrels while distillate inventories — which includes diesel — increased 3.38 million barrels. The official government data will be released later Wednesday.

The bullish structure of near-dated contracts being more costly than those later in time is still steeply backwardated. Global benchmark prices were $2.44 per barrel on Wednesday in backwardation compared to $1.61 the beginning of last month.

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