Oil hovered near $61 a barrel for a second day after capping its longest streak of gains in almost two months as traders weighed bearish signs of swelling US fuel inventories against a surprise decline in domestic crude stockpiles.
Futures in New York were little changed, after dipping less than 0.1 per cent on Wednesday. Official US inventory data showed gasoline, diesel and heating oil stockpiles swelled, reigniting demand concerns. Nationwide crude inventories fell to levels not seen since early November last week, government data showed, contradicting industry figures that pointed to an inventory build.
Crude has gained more than 10 per cent this month, following an agreement from the Organization of Petroleum Exporting Countries and allies to deeper-than-expected output cuts, as well as amid positive trade signals between the US and China. American crude exports also rose last week to the highest level since October, contributing to the inventory draw, the Energy Information Administration said.
Still, bullish EIA crude inventory data, coupled with market optimism surrounding Opec’s decision and the global economy kept oil prices supported, said Stephen Innes, Asia market strategist at AxiTrader. “Opec+ cuts should continue to support the oil price through year-end,” he said in an emailed note.
West Texas Intermediate crude for January delivery, which expires Thursday, was down 3 cents at $60.90 a barrel on the New York Mercantile Exchange at 3:39 p.m. Singapore time. The more active February contract was down 3 cents to $60.82.
Brent for February settlement was up 1 cents to $66.18 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5.34 premium to WTI for the same month.
Still, a deal between Washington and Beijing that promises to double US exports to China may not make up the economic cost of the trade war it seeks to defuse, if it happens. Economists calculating the impact of US tariffs, most of which will remain in place, and China’s retaliatory measures have put the economic losses at a cost in lost output ranging from 0.3 per cent to 0.7 per cent of real gross domestic product this year.
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