SINGAPORE: Oil prices edged up after plunging to multi-month lows previously as major producers may delay an output increase planned for next month and US inventories fell, though the gains were limited by persistent demand concerns.
Brent crude futures for November rose 35 cents, or 0.48 percent, to $73.05 a barrel at 9:07 a.m. Saudi time after dropping 1.4 percent in the previous session to their lowest close since June 27, 2023.
US West Texas Intermediate crude futures for October were up 35 cents, or 0.51 percent, to $69.55 after dropping 1.6 percent on Wednesday to the lowest settlement since Dec. 11.
“Pessimistic sentiments in oil markets seem to ease after robust API data and news of OPEC+ reconsidering output jump surfaced and boosted hopes,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
OPEC and its allies including Russia, known as OPEC+, is discussing delaying its oil output increase scheduled to start in October as prices have tanked, four sources from the producer group told Reuters on Wednesday.
Last week, OPEC+ was set to proceed with its 180,000 barrels-per-day output hike in October, part of a plan to gradually unwind its most recent cuts of 2.2 million bpd. But the potential end to a dispute halting Libyan exports and soft Chinese demand has pushed the group to reconsider.
Prices on Thursday also found support after American Petroleum Institute data showed US crude oil fell by 7.431 million barrels last week. This was more than analysts’ expectation in a Reuters poll of a 1 million barrel draw.
“API numbers released overnight were constructive,” said ING analysts in a client note, adding that if official government data shows the same decline later it could be “the largest weekly drop since June.”
Weekly US oil stocks data from the Energy Information Administration is due on Thursday at 5:30 p.m. Saudi time.
Markets were also awaiting further US macroeconomic data indicators that will be released later on Thursday.
“In the short-term, as there are impending key US economic growth data out today and tomorrow ... short-term speculators may be hesitant to take on fresh bearish positions on WTI crude, coupled with oversold readings seen in short-term momentum indicators,” OANDA Senior Market Analyst Kelvin Wong said in an email.
Persistent demand worries in China, the world’s largest oil importer, capped gains.
Data published over the weekend by the Chinese government revealed that manufacturing activity sank to a six-month low last month as factory gate prices tumbled and owners struggled for orders.
“Economically, the slowdown in the Chinese economy and weak oil demand there, which has surprised some in the market, have damaged market confidence,” Citi analysts said in a note.
