SINGAPORE: Oil markets started Thursday timidly, with rising U.S. crude inventories pressuring prices but an expected supply cut by producer cartel OPEC offering some support.
U.S. West Texas Intermediate (WTI) crude futures, were at $53.71 per barrel at 0051 GMT, 8 cents above their last settlement.
Front-month Brent crude oil futures <LCOc1> had yet to trade.
U.S. commercial crude oil inventories <C-STK-T-EIA> rose by 4.9 million barrels to 446.91 million barrels last week, the Energy Information Administration (EIA) said in a weekly report on Wednesday. That was the highest level since December 2017.
U.S. crude oil production <C-OUT-T-EIA> remained at a record 11.7 million barrels per day (bpd), the EIA said.
"U.S. inventory data ... continued to show significant supply builds, which comes on the back of sustained record U.S. crude oil production," said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.
Some analysts have warned that despite high global production, oil markets have little spare capacity to handle unforeseen supply disruptions.
However, Innes said that once U.S. pipeline bottlenecks were alleviated, which he said he expected in 2019, "the entire notion of a tight global spare capacity argument goes down the well".
Fearing a glut, the Middle East dominated producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) is considering supply cuts when it next meets on Dec. 6, although some members like Iran are expected to resist any voluntary reductions.
"While there is talk that OPEC+ Russia may again agree to a production cut, the concern is that not all relevant parties will be able to come to an agreement," said William O'Loughlin, investment analyst at Australia's Rivkin Securities.
"Saudi Arabia has hinted at a unilateral cut, but it will want to be careful about annoying the U.S. given that president Trump has been vocal about his desire for lower oil prices," he added.
U.S. President Donald Trump on Wednesday praised Saudi Arabia over recent oil prices and called for prices to go even lower.
"Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy!... Thank you to Saudi Arabia, but let's go lower!" he tweeted. - Reuters
Oil price rebounds after prior session's slide; glut worries persist
NEW YORK: Oil prices rose about US$1 a barrel a barrel on Wednesday, bouncing from the lowest levels in months, after U.S. government data showed strong demand for refined fuel, but concerns remained over rising global crude supply.
Brent crude futures gained 95 cents to settle at $63.48 a barrel, up 1.52 percent. U.S. West Texas Intermediate (WTI) crude futures rose $1.20 to settle at $54.63 a barrel, a 2.25 percent gain.
U.S. crude stocks rose 4.9 million barrels last week, the Energy Information Administration said, a larger-than-expected increase. Crude inventories have risen for nine straight weeks, the longest streak since March 2017.
Crude stocks at the Cushing, Oklahoma, delivery hub for WTI <USOICC=ECI> fell 116,000 barrels, the first drop in nine weeks, EIA said.
Gasoline stocks <USOILG=ECI> fell 1.3 million barrels to the lowest level since December 2017, while distillate stockpiles <USOILD=ECI> dropped by 77,000 barrels, the EIA data showed.
"Cushing posted the first decline in a couple of months, a possible portent of some leveling that could drive some support into the WTI curve," said Jim Ritterbusch, president of Ritterbusch and Associates, in a note.
The overall market remained weak after crude fell more than 6 percent the previous session, while world equities tumbled on worries about economic prospects.
Brent has fallen by more than 25 percent since reaching a four-year high of $86.74 on Oct. 3, reflecting forecasts of slowing demand and ample supply from Saudi Arabia, Russia and the United States.
Worried by the prospect of a new supply glut, the Organization of the Petroleum Exporting Countries is talking about reducing output just months after increasing production.
OPEC, Russia and other producers are considering a supply cut of between 1 million barrels per day (bpd) and 1.4 million bpd at a Dec. 6 meeting, sources familiar with the issue have said.
However, Saudi Arabia may find it harder to act to support prices, analysts said, after U.S. President Donald Trump on Wednesday praised Saudi Arabia for helping to lower oil prices.
Riyadh could feel more inclined to heed U.S. demands after Trump promised on Tuesday to be a "steadfast partner" of Saudi Arabia despite saying Crown Prince Mohammed bin Salman may have known about a plan to murder journalist Jamal Khashoggi.
U.S. energy firms cut three oil rigs in the week to Nov. 21, bringing the total down to 885, General Electric Co's <GE.N> Baker Hughes energy services firm said on Friday.
"It's fair to say that the price of oil is going to continue to be pretty volatile between now and Dec. 6 when OPEC meets," said Brian Kessens, managing director at Tortoise. "There's going to be a lot of different rhetoric and anticipation of what will actually transpire." - Reuters