TOKYO: Oil prices rose on Thursday, recouping some of the losses from sharp declines in the previous session, when crude fell as much as 4% on continued increases in U.S. crude stockpiles and concerns about lower demand growth.
Brent crude futures were up 75 cents, or 1.3%, at $60.72 a barrel by 0606 GMT. Prices dropped 3.7% on Wednesday to settle at $59.97, the international benchmark's lowest close since Jan. 28.
U.S. West Texas Intermediate crude futures were up 32 cents, or 0.7%, at $51.46 a barrel. They fell 4% in the previous session to $51.14, the lowest close since Jan. 14.
"Rising commercial crude oil inventories in the U.S., together with the country's high crude production, have strengthened the bearish sentiment in the market," said Abhishek Kumar, head of analytics at Interfax Global Energy.
The U.S. Energy Information Administration (EIA) on Wednesday reported that U.S. crude stockpiles rose unexpectedly for a second week in a row, climbing 2.2 million barrels after analysts had forecast a drop of 481,000 barrels.
At 485.5 million barrels, U.S. commercial stocks were at their highest since July 2017 and about 8% above the five-year average for this time of year, the EIA said.
On Tuesday, the EIA cut its forecasts for 2019 world oil demand growth. The negative outlook is prompting hedge fund managers to exit oil positions at the fastest rate since the fourth quarter of 2018 due to increasing fears about the health of the global economy.
The escalating trade war between the United States and China, the world's two biggest oil consumers, is causing the most concern among oil analysts, with consultants and banks cutting their demand growth forecasts.
The uncertain macroeconomic outlook could cause the Organization of the Petroleum Exporting Countries (OPEC) to roll over supply cuts it has enacted with other producers.
OPEC and non-member producers including Russia have limited their oil output by 1.2 million barrels per day (bpd) this year to prop up prices.
OPEC is set to meet at the end of June, although a meeting of the wider producers - known as OPEC+ - that agreed to the cuts, may not occur until early July.
While officials from some OPEC members have said the larger group will likely roll over the cuts, Algeria has proposed increasing the reductions, according to four sources familiar with the matter.
"The recent declines seen in oil prices strengthen the case for a continuation of the output-cut agreement," said Interfax's Kumar.
"Nevertheless ... countries such as Russia are concerned that they may further lose their market share to the U.S. by" continuing the cuts, he said.
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