Oil Prices Steady as US Stockpile Decline Offsets Global Demand Concerns, Reports Reuters

By Katya Golubkova

Oil prices remained relatively stable on Thursday following a decline in the previous session. The stability came as indications of increased fuel demand and decreased stockpiles in the United States, the largest oil consumer, helped mitigate concerns about weaker demand elsewhere, particularly in China.

Brent crude futures increased by 9 cents, or 0.12%, to $73.55 a barrel, while U.S. West Texas Intermediate crude rose by 4 cents, or 0.06%, to $69.73 per barrel early in the trading session.

On Wednesday, oil prices dropped more than 2% as fears of supply disruptions in Libya diminished and demand-related apprehensions persisted, despite China’s recent stimulus efforts. Initial reactions to the stimulus announcement had led to a rise in oil prices.

Capital Economics noted that while the new stimulus measures announced by Chinese officials coincided with price increases for many commodities, they do not significantly change the outlook for China’s demand for these materials.

The potential resurgence of Libyan oil exports is also impacting prices, with representatives from Libya’s eastern and western regions agreeing on a plan to appoint a central bank governor. This development could help alleviate the ongoing crisis regarding control of the country’s oil revenue, which has significantly affected exports.

Despite signs of stronger demand in the United States, the market largely overlooked this data. ANZ Research pointed out that the Energy Information Administration (EIA) reported a larger-than-expected decline in U.S. oil inventories across the board last week.

ANZ Research further indicated that a rebound in Libyan production would enter a market already grappling with concerns of weakened demand in both the U.S. and China.

However, the U.S. gasoline demand saw an uptick last week, exceeding 9 million barrels per day, as reported by the EIA, while distillate fuel supplied to the market also rose to over 4 million barrels per day.