LONDON: Brent oil futures steadied above $91 a barrel on Thursday, supported by a slide in the dollar but a glut in supply and concerns about global growth kept it not far above a 27 month low hit in the previous day. Brent for November delivery was up 26 cents at $91.64 by 0819 GMT.
The front-month contract fell as low as $90.57 on Wednesday, the lowest since June 2012, before recovering to close at $91.38 - still down 73 cents. US November crude climbed 39 cents to $87.70 after ending the previous session down $1.54. In the previous session, it hit its lowest level since April 2013 at $86.83.
Minutes of the US Fed's last policy meeting released on Wednesday showed signs that concerns about the impact of a strengthening dollar on the economy may delay any decision on interest rate changes.
A falling dollar makes dollar-denominated commodities such as oil less expensive to holders of other currencies. However the underlying negative outlook for oil that has seen Brent fall by around 20 percent from a peak in June remains entrenched, with ample supply and sluggish demand growth analysts said.
Crude inventories soared a more-than-expected 5 million barrels in the week to Oct. 3, data from the US Department of Energy's Energy Information Administration showed on Wednesday. A build of 1.5 million barrels had been forecast by analysts polled by Reuters. "Yesterday's stocks data was not supportive and we've had heavy selling on the back of weak data," said Eugen Weinberg, chief commodity analyst at Commerzbank in Frankfurt. He added that the extent of the sell off may meant that there could be a slight recovery. "There could be a reversal coming due to the amount of shorts in the market, which are extremely high," he said. "This indicates that a lot of pessimism is priced in and there is not much risk to the down side."
GERMAN DATA DISAPPOINTS
Weak German economic data emphasised the cloudy economic outlook in the region. German exports slumped by 5.8 percent in August, their biggest fall since the height of the global financial crisis in January 2009, in yet another sign that Europe's largest economy is faltering amid broader euro zone weakness and crises abroad. "Demand has been pretty slack and there's oversupply. Any negative economic data out of Europe or China has reinforced this orthodoxy so prices fall further," said Phin Ziebell an oil analyst at National Australia Bank. Some analysts were encouraged by a draw of 1.58 million barrels in crude stocks at the Cushing, Oklahoma, delivery hub. Investors also watched the Middle East where Islamic State fighters on Wednesday launched a renewed assault on Kobani, close to the Syrian-Turkish border, as US and coalition warplanes attacked IS targets in Syria. Top diplomats from Iran, the European Union and the United States, including US Secretary of State John Kerry, will meet in Vienna next week, to try to make progress towards a long-elusive deal to end a dispute over Tehran's nuclear programme by a Nov. 24 deadline.
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