Picture: 123RF/EVGENI BASHTA
Picture: 123RF/EVGENI BASHTA

London — Oil prices were mixed on Wednesday as Brent crude extended losses due to depressed global stock markets, but US crude rose slightly after industry data showed a surprise drop in inventories in the US.

Brent crude futures, the international benchmark for oil prices, was down 17c at $58.72 a barrel by 8.46am GMT. US West Texas Intermediate (WTI) crude futures rose 13c to $53.75 a barrel.

Front-month WTI prices settled down for a sixth straight session on Tuesday, their longest losing streak this year, after US manufacturing activity dived to a 10-year low as US-China trade tensions weighed on exports.

However, oil pared some losses after American Petroleum Institute (API) data showed US crude stocks fell last week by 5.9-million barrels, against expectations for an increase of 1.6-million barrels.

“It seems to be a fight between two opposing forces; on the bullish side another draw in US inventories, on the bearish side concerns on weaker economic data, and currently ebbing tensions in the oil market,” said Giovanni Staunovo, an oil analyst at UBS. “I still hold a constructive outlook short-term.” 

The Energy Information Administration’s (EIA) weekly oil inventories report is due at 12.30pm GMT on Wednesday.

“Even if the EIA were to confirm the API crude oil number, the momentum off a single number can easily fade as the economy is front and centre for global markets right now,” said Harry Tchilinguirian, global oil strategist at BNP Paribas.

Iran’s oil minister Bijan Zanganeh said he expected a slight surplus on the oil supply side next year.

Russian energy minister Alexander Novak said in an article in Energy Policy magazine that global oil demand is expected to rise by 1.4-million barrels per day (bpd) next year after growing at a rate of 1-million bpd in 2019.

Novak also said that output caps in place as part of the global oil production deal between oil cartel Opec and its allies were temporary and Russia would only undertake such cuts when they were in the national interest.

Meanwhile, Ecuador, one of the smallest members of Opec, said it will leave the 14-nation bloc from January 1 2020 due to fiscal problems. Ecuador will be the second country to withdraw from Opec in the past year after the departure of Qatar.

Reuters