Oil stable after sinking to two-year lows

New York — Oil prices steadied in early Asian trade on Thursday after sinking to their lowest level this year as US production and gasoline inventories ticked up at the same time concerns grew that economic slowdowns would weaken fuel demand.

Brent crude futures were up 62c, or 0.8%, at $77.79 a barrel by 1.30am GMT, while US West Texas Intermediate (WTI) crude futures gained 69c, or 1%, to $72.70 a barrel.

Brent had settled on Wednesday below the year’s previous closing low touched on the first day of 2022, while US WTI crude had fallen to a fresh yearly low.

US crude production rose to 12.2m barrels per day last week, its highest level since August, the Energy Information Administration (EIA) said on Wednesday.

While US crude stocks fell last week, gasoline and distillate inventories surged, adding to concerns about easing demand. Gasoline stocks grew by 5.3m barrels in the week to 219.1m barrels, and distillate stockpiles, including diesel and heating oil, swelled by 6.2m barrels, the EIA said.

Helping to lift oil prices was data showing that Japan’s economy shrank less than initially estimated in the third quarter. Loosening Covid-19 restrictions in China, among the biggest crude oil consumers in the world, also aided in steadying oil prices.

Meanwhile, Western officials are in talks with Turkish counterparts to resolve oil tanker queues off Turkey, a British Treasury official said, after the G7 and EU rolled out new restrictions on December 5 aimed at Russian oil exports.

At least 20 oil tankers continue to face delays to cross from Russia’s Black Sea ports to the Mediterranean as operators race to adhere to the Turkish rules.

Reuters