Brent sticks above US$60; Iran news offsets bearish US stockpiles data

[SINGAPORE] Brent crude was flat on Thursday, managing to hold above $60 a barrel as investors brushed aside bearish US inventories data to focus on the lack of a deal in talks over Iran's nuclear programme.

Tehran's ambassador to the International Atomic Energy Agency (IAEA) said on Wednesday no deal had been reached on the duration of any possible final agreement with world powers on Iran's programme. That allayed investors' fears of an imminent rise in Iranian oil supply.

Brent has traded around US$60 since mid-February, rebounding from a six-year low of about US$45 hit in January.

The April contract inched up 5 cents to US$60.60 a barrel by 0503 GMT while West Texas Intermediate (WTI) crude rose 22 cents to US$51.75 a barrel.

A 2 per cent gain in the previous session narrowed WTI's spread with global benchmark Brent to less than US$9 a barrel. "We've got a technically more constructive picture now," Michael McCarthy, chief strategist at CMC Markets in Sydney said, pointing to the end of seven straight months of oil price falls. "That could be contributing to the surprisingly bullish reaction to the overnight news," he said.

Government data showed commercial crude stockpiles in the United States hit a record high, rising 10.3 million barrels last week, twice as much as expected, but that failed to push prices down. "The rate of stock build has accelerated week by week throughout February and with upcoming refinery maintenance likely to weaken demand for crude, it is possible that this will continue in March," BNP Paribas analysts said in a note.

Saudi Arabia's oil minister voiced cautious optimism about the market outlook on Wednesday, saying he expected oil prices to stabilise.

A deteriorating security situation led Libya's state oil company to declare force majeure on 11 of its oilfields on Wednesday. "It's not a huge difference but supportive of the market overall," Mr McCarthy said.

Output from the Opec producer was at more than 400,000 barrels per day on March 1.

REUTERS