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[NEW YORK] Oil futures gave up most of their losses and traded little changed on Wednesday as data showed gasoline demand soared in the United States last week, offseting the impact of a larger-than-expected build in crude inventories.
The figures come as the market braces for the outcome of a producer meeting set for Sunday in Doha to discuss freezing output, widely expected to do little to trim oversupply.
Brent crude was down 5 cents at US$44.64 per barrel by 11:15 am EDT (1515 GMT), while US crude fell 6 cents to US$42.11.
US crude inventories rose 6.6 million barrels last week to 536.53 million barrels, the Energy Information Administration said on Wednesday, compared with analyst expectations of a 1.9 million barrel rise.
But a larger than expected draw in gasoline inventories softened the blow of soaring crude stocks. Gasoline fell by 4.2 million barrels to 239.76 million, compared with an analyst forecast of a 1.4 million barrel draw.
"There's this gasoline demand and it's otherworldly. I can't begin to describe it any other way," said Carl Larry, director of business development for oil and gas at Frost & Sullivan. "Without a doubt, we're going to see record gas demand in the US this year and that might even hit 10M b/d."
Production numbers in the United States also declined in a sign that the consistent decline in rig counts is having an impact on output, analysts said.
"Ultimately, the downside based upon inventory figures is limited because of two factors - the strong gasoline demand and falling US crude production," said Anthony Headrick, energy market analyst at CHS Hedging.
Prices were under pressure earlier in the session after comments by Saudi Oil Minister Ali al-Naimi in the al-Hayat newspaper in which he confirmed his country's position that an outright production cut was out of the question.
"Forget about this topic," Mr al-Naimi told the newspaper when asked about any possible reduction in his country's crude output.
Iranian Oil Minister Bijan Zanganeh does not plan to attend the Doha meeting but Iran will be sending a representative, an Iranian journalist from the Seda weekly wrote on Twitter on Wednesday.
Iran has said it does not plan to participate in the freeze agreement as it seeks to boost its production in the post-sanctions era.
Morgan Stanley analysts said the market may still be underestimating the potential near-term headline upside risk of the Sunday meeting.