Oil prices have inched lower after data from industry group the American Petroleum Institute (API) highlighted a rise in the US crude inventories.
This added to concerns about oversupply. However, rapid economic recovery in China limited losses.
Brent crude futures fell $0.10, or 0.2%, at $42.98 a barrel, while US West Texas Intermediate (WTI) crude futures were down $0.12, or 0.3%, to $40.50 per barrel, Reuters reported.
According to data released by the API, the US crude oil inventories increased last week, while gasoline and distillate inventories fell more than expected.
Rakuten Securities commodity analyst Satoru Yoshida was quoted by the news agency as saying: “The market is mixed as optimism about China’s quick economic rebound is offset by persistent worries that the rising coronavirus cases in the United States and other areas will stall a recovery in fuel demand.”
“We expect the WTI to stay in the $38.50-$41.50 range for the next couple of weeks.”
Furthermore, the US Energy Information Administration (EIA) said that crude oil production in the US is expected to drop by 600,000 barrels per day (bpd) this year.
However, EIA also anticipates recovery of fuel demand by the end of next year.
Nissan Securities research general manager Hiroyuki Kikukawa said: “The EIA’s forecast of a lower decline in US output was partially cushioned by its outlook for firm demand recovery, which limited losses in oil markets.”
UAE’s state-owned firm ADNOC intends to boost oil exports next month.
This hints that the Organization of the Petroleum Exporting Countries (OPEC), Russia and allies, together known as OPEC+, are preparing to lift record supply cuts next month, Reuters said citing three sources familiar with the development.