LONDON: Brent crude oil steadied above $55 a barrel on Wednesday, not far above the week's lows, as more evidence emerged of global oversupply that has filled fuel storage tanks around the world.
U.S. crude oil inventories rose by 4.8 million barrels in the week to March 20, data from the American Petroleum Institute (API) showed on Tuesday, pushing total U.S. crude oil stockpiles to record highs above 450 million barrels.
Chinese crude oil stocks are also at historic highs and the country's commercial and strategic storage is almost full, a Sinopec trading executive told an industry forum on Wednesday.
With storage approaching its limit, China's oil imports will likely stay flat or rise only slightly this year, the official said.
Brent crude oil was up 32 cents at $55.43 a barrel by 0957 GMT. U.S. light crude oil was four cents down at at $47.47 per barrel.
Analysts from the International Energy Agency and the Organization of the Petroleum Exporting Countries estimate that world oil demand is now running at more than 1.5 million barrels per day below supply on average and say the market is unlikely to balance until the second half of this year.
That means several more months of rising inventory levels and the risk of more pressure on oil prices.
China has been taking advantage of cheap oil to build up its strategic petroleum reserves (SPRs), helping push its imports to record highs late last year despite an economy growing at its slowest pace in 25 years, but that process is now ending.
"Although the market should already have expected that the demand from China's SPR would not last forever, it (was) hard to predict when this time would come," said Daniel Ang, investment analyst at oil brokerage Phillip Futures.
U.S. oil prices have been squeezed as crude stocks continue to rise to record highs.
"U.S. crude stocks will build through May ... (which) should support bearish sentiment for now," Morgan Stanley analysts said in a note on Wednesday.
Investors awaited U.S. oil inventory data from the Energy Information Administration (EIA) due later on Wednesday to see if it confirmed the API oil stock report.
A Reuters poll of eight analysts forecast the EIA report would show a crude stock build of 5.1 million barrels on average last week.
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