Crude futures steady after fall on U.S. oil products stocks gain
Tokyo. Oil prices steadied on Thursday after falling in the previous session when official data showed U.S. stockpiles of products like gasoline rose sharply last week, suggesting weak demand during the peak driving season.
Brent crude LCOc1 futures were up 13 cents, or 0.2%, at $63.80 a barrel by 0237 GMT. They fell 1.1% on Wednesday.
U.S West Texas Intermediate crude CLc1 futures were down 1 cent at $56.77. The U.S. benchmark dropped 1.5% in the previous session.
Oil prices have fallen this week as worries over a Middle East conflict have eased, oil production in the Gulf of Mexico has resumed after a storm and worries have emerged over Chinese economic growth.
The “easing of tensions between the U.S. and Iran, mixed Chinese growth data and storm-hit operations getting back online are all pressuring oil prices downward,” said Alfonso Esparza senior market analyst at OANDA.
Japan’s exports fell for a seventh straight month in June, with shipments to China falling more than 10%, while Japanese manufacturers’ business confidence fell to a three-year low.
On the oil supply front, data on Wednesday from the U.S. Energy Information Administration showed a larger-than-expected drawdown in crude stockpiles last week, but traders focused on large builds in refined product inventories dragging prices down.
U.S. crude inventories USOILC=ECI fell 3.1 million barrels, the EIA said, more than analysts’ forecasts for a decrease of 2.7 million barrels, informs Reuters.
However, gasoline stocks USOILG=ECI rose 3.6 million barrels, compared with analysts’ expectations in a Reuters poll for a 925,000-barrel drop. Distillate stockpiles USOILD=ECI grew by 5.7 million barrels, much more than expectations for a 613,000-barrel increase, the EIA data showed.
“Gasoline consumption is painfully weak given U.S. consumers are in peak driving season,” said Stephen Innes, managing partner at Vanguard Markets.
Crude production was disrupted last week by Storm Barry, which came ashore on Saturday in central Louisiana as a Category 1 hurricane, the first major storm to hit the U.S. Gulf of Mexico this season.
More than half of daily crude production in the Gulf of Mexico remained offline by Tuesday, as most oil companies were re-staffing facilities to resume production.
The market shrugged of another incident involving a tanker in the Middle East amid tensions between the United States and Iran.
U.S. officials say they are unsure whether an oil tanker towed into Iranian waters was seized by Iran or rescued after facing mechanical faults as Tehran asserts, creating a mystery at a time of high tension in the Middle East.