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A drilling rig operates in the Permian Basin oil and natural gas production area in Lea County, New Mexico, US. File photo: REUTERS/NICK OXFORD
A drilling rig operates in the Permian Basin oil and natural gas production area in Lea County, New Mexico, US. File photo: REUTERS/NICK OXFORD

London — Oil prices slipped on Thursday in thin trade ahead of a public holiday, as traders weighed a larger-than-expected build in US oil stocks against tightening global supply.

Brent futures were down 59c, or 0.5%, at $108.19 a barrel, while US West Texas Intermediate futures were off 57 cents or 0.6%, at $103.68 a barrel at 9.06am GMT.

Both contracts on Wednesday had shrugged off a build in US crude inventories to end the trading session roughly 4% higher.

“Asian buyers have been absent today, with volumes potentially being curbed by the long weekend across most of Asia, Europe, and North America,” Oanda analyst Jeffrey Halley wrote in a note.

The International Energy Agency on Wednesday warned that from May onwards roughly 3-million barrels per day of Russian oil could be shut-in due to sanctions or voluntary embargoes.

At the same time, major global trading houses are also planning to curtail crude and fuel purchases from Russia's state-controlled oil companies in May, Reuters reported on Wednesday.

The probability of a EU ban on Russian oil being agreed may be almost zero, but no-one will be able or wanting to say that clearly, Vandana Hari, founder of oil market analysis provider Vanda Insights said.

“And, even a continuing sabre-rattling will be enough to keep the risk premium alive.”

Despite signals that global supply disruption will persist, oil stocks in the US rose by more than 9-million barrels last week, the US Energy Information Administration said on Wednesday, driven in part by releases from the nation's strategic reserves. Analysts in a Reuters poll had anticipated just an 863,000-barrel build.

US petrol stocks fell 3.6-million barrels last week, far above anticipated levels, and distillate inventories also declined.

Reuters

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