(Bloomberg) — Oil staged a modest rebound after tumbling to the lowest level since late 2021, with an industry group flagging a drop in US stockpiles.

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Global benchmark Brent rose toward $70 a barrel after sliding by more than 3% on Tuesday, while West Texas Intermediate was near $66. The industry-funded American Petroleum Institute estimated that US commercial stockpiles fell by about 2.8 million barrels last week, according to people familiar with the figures. Official data on inventories and demand are due later on Wednesday.

Crude has plunged by almost a fifth so far this quarter on concerns that slowing growth in the US and China, the leading consumers, will crimp demand at a time of robust and expanding supplies. Market metrics — including the shape of the entire futures curve — point to conditions fast becoming far less tight.

Oil’s dramatic slump will be a tailwind for central bankers around the world as they press home their fight against inflation, with the Federal Reserve expected to start reducing interest rates next week given easing price pressures and signs of a softening labor market. It’ll also be a boon for nations that rely on crude imports to power their economies, such as China and Japan.

Traders were also tracking the progress of Hurricane Francine, which is expected to make landfall in Louisiana later Wednesday. With Chevron Corp. and Shell Plc among companies taking measures, federal officials said the total amount of shut-in oil represented nearly a quarter of crude production in the Gulf of Mexico. In addition, eight refineries may lie in the system’s path.

Brent’s prompt spread — the difference between its two nearest contracts — has narrowed to 38 cents a barrel in backwardation. While that’s still a bullish pattern — with the nearest price trading at a premium to the next in sequence — it compares with a gap of 92 cents about a month ago.

Oil’s retreat has already forced OPEC+ to postpone an output hike, stoking investor concern that the additional barrels could be still be brought to the market closer to 2025. On Thursday, the International Energy Agency will issue its monthly outlook, including estimates for worldwide supply and demand.

Executives, traders and hedge funds gathered in Singapore this week for the Asia Pacific Petroleum Conference have been cautious about crude’s prospects. Goldman Sachs Group Inc. analyst Daan Struyven said the bank expected the market to flip to a glut as soon as November or early December.

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