Oil rises despite unexpectedly big increase in US stocks
London — Oil rose on Thursday in a sign that investors are wary of pushing the market lower in response to an unexpectedly large rise in US stocks of refined products that has increased concern about the demand outlook.
Brent crude futures were at $61.55 a barrel, up 33c by 10.08am GMT.
US West Texas Intermediate (WTI) crude futures were at $56.16 a barrel, up 20c, after having fallen nearly 3% on Wednesday.
US crude oil inventories fell by 5.6-million barrels in the week to December 1, to 448.1-million barrels, putting stocks below seasonal levels in 2015 and 2016.
But petrol stocks rose 6.8-million barrels, to 220.9-million barrels, according to the report from the US Energy Information Administration (EIA), much more than analyst expectations for a gain of 1.7-million barrels.
"We had a nice run to the downside yesterday and it seems for now that it’s ‘take your short profits soon and keep your longs for longer’," Saxo Bank senior manager Ole Hansen said.
"We are at the time of year when liquidity tends to dry up and people are more concerned about reducing risk than adding it."
PVM Oil Associates said in a note: "Inventories in other products were down by 5.36-million barrels on the week. The net result is a 2.52-million barrel draw in total commercial oil inventories.
"Current levels are nearly 7% below last year and the surplus to the five-year average is only 3.9%. On balance, the weekly data was not as bad as it seems at first sight."
But more troubling for the bulls, US oil production rose by 25,000 barrels a day to 9.71-million barrels a day, the highest since monthly figures showing the US produced more than 10-million barrels a day in the early 1970s.
Soaring US output threatens to undermine efforts led by oil cartel Opec and Russia to bring production and demand into balance following years of oversupply.
Sukrit Vijayakar, MD of energy consultancy Trifecta said there were "darker shadows over the pace of rebalancing, if at all any is taking place".