Oil steadies amid fall in US inventories, weak economic data

[LONDON] Oil steadied on Wednesday, following several days of declines, after industry data showed a surprise drop in US crude inventories, although gains were capped as weak economic readings in the United States depressed global markets.

Brent crude futures, an international benchmark for oil prices, were up 20 US cents to US$59.09 a barrel at 1153 GMT. US West Texas Intermediate (WTI) crude futures rose 40 US cents to US$54.02 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 dropped to a 10-year low as US-China trade tensions weighed on exports.

But prices found some support from American Petroleum Institute (API) data which 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," he added.

The Energy Information Administration's (EIA) weekly oil inventories report is due at 1430 GMT.

"Even if the EIA were to confirm the API crude oil number this afternoon, 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.

Russian President Vladimir Putin said Russia would continue to be a responsible player in the alliance between Organization of the Petroleum Exporting Countries (Opec) and non-Opec oil-producing nations, known as Opec+.

Speaking at an energy forum in Moscow attended by the Saudi and Iranian energy ministers, Putin said it was important to use all available tools to balance the energy markets.

Iran's Oil Minister Bijan Zanganeh said he expected a slight surplus on the oil supply side next year.

United Arab Emirates Minister of Energy and Industry Suhail al-Mazrouei said Opec and its allies were monitoring global oil markets, and that conformity levels were the same as previously announced at the last Opec+ joint ministerial monitoring committee meeting.

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

REUTERS