TOKYO: Brent crude oil prices edged up to hold above $99 a barrel on Wednesday, but stood not far off a 16-month low hit a day earlier amid worries about global oil demand.
Prices were supported by a larger-than-expected fall in US crude inventories, although gains were capped by a firmer US dollar, which makes commodities priced in the greenback more expensive for holders of other currencies.
The dollar stood near a 14-month high against the euro hit on Tuesday, with investors betting the Federal Reserve would hike interest rates earlier than expected. Brent crude for October delivery was trading 17 cents higher at $99.33 a barrel by 0154 GMT, after falling to $99.03 on Tuesday, the lowest intraday price since May 1, 2013. US crude was up 21 cents at $92.96 a barrel.
"After falling below the $100 milestone, Brent potentially could go further lower to around $95 (a barrel)," said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research & Consulting.
"Even demand in the US, whose economy continues to expand, is not rising that much, and there are concerns of a further weakening in global demand."
CRUDE STOCKS FALL
Oil prices found support from Energy Information Administration (EIA) data showing a 1.9 million-barrel decline in US crude oil inventories last week, compared with analysts' expectations for a fall of 1.1 million barrels.
US gasoline stocks unexpectedly rose by 719,000 barrels, while distillate stocks gained by 1.7 million barrels. Gulf Arab oil ministers hold their annual meeting on Thursday in Kuwait that could include discussions about price levels as the Brent price falls below OPEC's acceptable price of $100 a barrel.
"The price hovers really close to $100 and there seems to be no move (for OPEC) to support prices," Akuta added.
The United States is putting the finishing touches on possible new sanctions on Russia's defense, energy and financial sectors over its intervention in Ukraine, the US State Department said on Tuesday.
European Union trade commissioner Karel De Gucht called on Tuesday for the United States to export oil and natural gas to Europe under a transatlantic trade deal in part to reduce the region's dependence on Russian energy resources.
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