Brent oil holds losses amid speculation global glut persisting

[TOKYO] Brent oil held losses amid speculation the global glut will persist after the world's largest producers failed to take action to limit supply.

Futures were little changed in London after slipping 0.8 per cent on Tuesday. US crude stockpiles likely expanded by 705,000 barrels last week, a third weekly gain, according to a Bloomberg survey before data from the Energy Information Administration on Thursday.

A meeting Monday between Saudi Energy Minister Khalid Al-Falih and his Russian counterpart ended without concrete steps and Al-Falih said there's no need to freeze output now.

Oil rallied in August on speculation members of the Organization of Petroleum Exporting Countries and other producers would agree to cap output when they meet informally in Algiers later this month.

A similar proposal was derailed in April over Saudi Arabia's insistence that Iran participate. US inventories are more than 100 million barrels above the 5-year seasonal average.

"The markets will still be watching very closely any concrete action that comes out of what happened between the Saudis and Russia," said David Lennox, a resources analyst at Fat Prophets in Sydney. Increasing US stockpiles "will be a headwind for any rally," he said.

Brent for November settlement traded at US$47.41 a barrel, up 15 US cents, on the London-based ICE Futures Europe exchange at 11.34am in Tokyo.

Prices lost 37 US cents to close at US$47.26 on Tuesday. The global benchmark traded at a US$1.87 premium to West Texas Intermediate (WTI).

WTI for October delivery traded at US$44.93 barrel on the New York Mercantile Exchange, up 10 US cents. The contract rose 39 US cents, or 0.9 per cent, from Friday's close to US$44.83 on Tuesday. There was no settlement on Monday because of the US Labour Day holiday.

BLOOMBERG