Oil prices have declined on signs of a rise in the US crude stocks, adding to concerns that world’s demand for oil may weaken amid further signs of economic slowdown globally.
Global benchmark Brent crude oil futures edged down by $0.57 at $58.85 a barrel, while US crude oil futures slipped $0.56 at $52.80 a barrel, reported Reuters.
A weekly report released by the American Petroleum Institute (API) highlighted a larger-than-expected build-up in US stocks by 10.5 million barrels to 432.5 million barrels in the week that ended on 11 October.
AxiTrader Asia Pacific market strategist Stephen Innes was quoted by Reuters as saying: “An enormous US inventory build hits at precisely the wrong moment when the markets are overly focused on demand devastation due to the latest run of weaker global economic data.”
If confirmed by the government data, the rise in stocks would be the biggest inventory swell since February 2017, Innes added. Meanwhile, hopes of a potential trade deal between the US and China helped to limit oil price losses.
US Treasury Secretary Steven Mnuchin said that trade negotiators are working on nailing down on the signing of a Phase 1 deal next month with the respective presidents of both the nations.
CMC Markets Sydney brokerage chief market strategist Michael McCarthy said: “Overall, we are seeing a more constructive picture both in terms of the demand side of the equation with the partial agreement from the US (and) also from a technical point of view (Prices) are at close to the bottom end of trading range rather than the top.”