An oil well is seen near Denver, Colorado. Picture: Reuters
An oil well is seen near Denver, Colorado. Picture: Reuters

Tokyo — Oil prices crept up on Wednesday, extending the previous session’s rise, but gains were kept in check amid growing fears of how a global economic slowdown will affect demand.

Brent was up by 17c, or 0.3%, at $68.14 by 3.11am GMT, reversing earlier losses of a similar margin. On Tuesday, the global benchmark rose by 76c to $67.97 a barrel, not far below its year-to-date high of $68.69, reached on March 21.

US crude futures added 9c, or 0.2%, to $60.03, also reversing losses in earlier trade. The US benchmark rose by $1.12, or 1.9%, to $59.94 a barrel in the previous session.

“We seem to have reached a state of equilibrium after the recent headline-driven choppy trading and we need to see some new impetus for price direction,” said Jeff Halley, senior market analyst at Oanda in Singapore.

That is unlikely to come until there is a conclusion on the US-China trade talks, he said. Discussions between the world’s two largest economies are scheduled to restart on Thursday as the two nations seek to end an eight-month trade war.

Oil rose on Tuesday as Venezuela’s main oil export port of Jose and its four crude upgraders were unable to resume operations following a massive power blackout on Monday, the second in a month.

Prices have risen by more than 25% so far in 2019, supported by supply curbs initiated by oil cartel Opec and other major producers, along with US sanctions on exports from Venezuela and Iran.

But worries about demand have limited oil’s rally as manufacturing data from Asia, Europe and the US pointed to an economic slowdown.

The American Petroleum Institute (API) said late on Tuesday that US crude inventories rose by 1.9-million barrels in the latest week, while analysts had forecast a decrease of 1.2-million barrels.

The market was waiting to see whether official figures due later on Wednesday would confirm the institute’s data.

“It will be very interesting to see the inventory numbers tonight. If we see a fall, we could see a sharp move higher,” Oanda’s Halley said.

Hedge funds and other money managers have increased bets that demand for oil will be sustained, even as the market rallied last week.