LONDON: Oil prices steadied on Thursday after the US Energy Department reported a ninth consecutive weekly drawdown of crude stocks but an overall build in oil inventories.
US West Texas Intermediate crude for September delivery , the new front-month contract from Thursday, was up 12 cents at $45.87 a barrel at 1035 GMT. The August contract expired on Wednesday after rising 29 cents, or 0.7 percent, to settle at $44.94 a barrel.
Brent crude was up 10 cents at $47.27 a barrel.
US crude inventories fell 2.3 million barrels in the week ending July 15, data from the US Energy Information Administration showed.
But at 519.5 million barrels, crude oil inventories are at historically high levels for this time of year, the EIA said.
Total US oil inventories are also at a record high, reflecting a very well supplied global market.
That should undermine prices in the medium term, said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.
"There is lots of oil around," said Varga. "Market strength is not sustainable."
ABN AMRO senior energy economist Hans van Cleef said investors were concerned by the global oversupply and high inventories:
"Near-term there are still some downside risks," van Cleef said, forecasting Brent could slip around $5 lower towards $42 or $43 a barrel.
US gasoline stocks rose 911,000 barrels last week, against a forecast for unchanged, and were well above the upper limit of the average range, the EIA said.
July is the peak of summer when Americans traditionally take to the road, driving up gasoline demand.
A glut of refined products has worsened an already-grim outlook for US crude oil for the rest of the year and the first half of 2017, traders warned this week, as the spread between near-term and future delivery prices reached its widest in five months.
Comments
Comments are closed for this article.