Oil prices recuperated losses on Thursday after dropping for the third straight day earlier in the session due to the US possibly seeing more build in crude and gasoline stocks and abating concerns over crude supplies.
Brent crude oil futures climbed 1.25% to $86.89 per barrel in the UK, having earlier dropped 0.50% to $85.39 per barrel. The US West Texas Intermediate (WTI) crude oil futures also rose 0.66% to $84.11 per barrel after tumbling 0.97% to $84.30 per barrel earlier in the session.
The international and US benchmark have largely returned their gains this week following a more than 2% slide on Wednesday.
US Sees More Stock Build, Middle East Supply Concerns Ease
Oil’s weakness came as US crude oil inventories may have increased by around 12.94 million barrels in the previous week, according to sources citing data from the American Petroleum Institute (API).
The reading was the highest supply build since February and followed a draw of 4.21 million barrels in the week ending September 29.
Analysts see API’s figures as offering no support to sentiment, while they pointed at falling refinery run rates due to maintenance as the reason for the surge.
Gasoline stocks, the US’s top fuel product, added 3.65 million barrels to the 3.95 build logged in the prior week. The numbers were a complete opposite of analysts’ forecasts for an 800,000-barrel loss and further raised concerns about the country’s sluggish fuel demand.
On the other hand, distillate supplies shed 3.54 million compared to the previous week’s rise of 0.35 million.
Markets will await supply signals from the Energy Information Administration’s (EIA) data set to be released later Thursday.
Crude prices have also been weighed by easing supply worries in the Middle East. Oil has weakened on the possibility that the ongoing fight between Israel and Hamas militants would have a limited impact on the market.
However, the prices’ slump was curbed as the EIA expects a further decrease in global oil stockpiles in the second half of this year. The agency was optimistic that lower inventories, which might keep global supply below consumption, would drive oil prices higher.
