Oil steadied after reaching a seven-week high, buoyed by a sustained risk-on sentiment in broader markets, which overshadowed signs of rising stockpiles. Brent crude traded above $85 a barrel, while West Texas Intermediate neared $82. Optimism driven by expectations of US interest rate cuts also lifted the S&P 500 to a new record.

The American Petroleum Institute reported a 2.3 million-barrel increase in US crude inventories, marking the third consecutive rise, with stockpiles at the Cushing, Oklahoma hub also growing. Despite initial losses earlier in the month due to OPEC+ plans to increase market supply, oil has rebounded as Asian refiners resume operations post-maintenance, boosting demand. However, Brent’s relative strength index exceeding 70 indicates oil may be nearing overbought levels.

Bank of Japan board members discussed accelerating policy normalization amid concerns that the weak yen’s impact on inflation might necessitate a response, according to minutes from their April meeting. Some members emphasized the importance of exchange rates on economic activity and prices, suggesting monetary policy adjustments if currency fluctuations affect the inflation outlook.

The minutes hint at a potential rate hike as early as July, although market speculation has cooled after the bank announced plans to reduce bond buying next month. Analysts will watch upcoming data closely, with consumer inflation expected to reach 2.6% in May, the 26th consecutive month meeting or exceeding the bank’s target. Some central bankers advocated for moderate rate hikes to preempt the need for rapid increases seen in the US and Europe. Governor Kazuo Ueda acknowledged the possibility of a rate hike at the July 30-31 meeting, contingent on incoming data.