LONDON (Reuters) – Oil steadied on Wednesday, following several days of declines, after industry data showed a surprise drop in U.S. crude inventories, although gains were capped as weak economic readings in the United States depressed global markets.
FILE PHOTO: A pumpjack is seen at the Sinopec-operated Shengli oil field in Dongying, Shandong province, China January 12, 2017. REUTERS/Chen Aizhu/File Photo
Brent crude futures, an international benchmark for oil prices, were up 20 cents to $59.09 a barrel at 1153 GMT. U.S. West Texas Intermediate (WTI) crude futures rose 40 cents to $54.02 a barrel.
Front-month WTI prices settled down for a sixth straight session on Tuesday, their longest losing streak this year, after U.S. manufacturing activity dropped to a 10-year low as U.S.-China trade tensions weighed on exports.
(GRAPHIC – U.S. manufacturing: here)
But prices found some support from American Petroleum Institute (API) data which showed U.S. crude stocks fell last week by 5.9 million barrels, against expectations for an increase of 1.6 million barrels. [API/S]
“It seems to be a fight between two opposing forces; On the bullish side another draw in U.S. inventories, on the bearish side concerns on weaker economic data, and currently ebbing tensions in the oil market,” said Giovanni Staunovo, an oil analyst at UBS.
“I still hold a constructive outlook short term,” he added.
The Energy Information Administration’s (EIA) weekly oil inventories report is due at 1030 EDT (1430 GMT). [EIA/S]
“Even if the EIA were to confirm the API crude oil number this afternoon, the momentum off a single number can easily fade as the economy is front and center for global markets right now,” said Harry Tchilinguirian, global oil strategist at BNP Paribas.
Russian President Vladimir Putin said Russia would continue to be a responsible player in the alliance between OPEC and non-OPEC oil-producing nations, known as OPEC+.
Speaking at an energy forum in Moscow attended by the Saudi and Iranian energy ministers, Putin said it was important to use all available tools to balance the energy markets.
Iran’s Oil Minister Bijan Zanganeh said he expected a slight surplus on the oil supply side next year.
United Arab Emirates Minister of Energy and Industry Suhail al-Mazrouei said OPEC and its allies were monitoring global oil markets, and that conformity levels were the same as previously announced at the last OPEC+ joint ministerial monitoring committee meeting.
(GRAPHIC – OPEC Production: here)
Meanwhile, Ecuador, one of the smallest members of the Organization of the Petroleum Exporting Countries, said it would leave the 14-nation bloc from Jan. 1 due to fiscal problems. Ecuador will be the second country to withdraw from OPEC in the last year after the departure of Qatar.
Additional reporting by Florence Tan and Roslan Khasawneh in Singapore; Editing by Susan Fenton and Mark Potter