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Oil halts 4-day drop, US stockpile data supports
[SINGAPORE] Brent crude extended gains on Thursday to hold above US$51 a barrel, after an unexpected fall in US crude stocks snapped a 4-session decline the previous day.
Data showing the US economy remained resilient amid slowing global growth helped bolster oil, which was also supported by Chinese crude imports likely hitting a record high in December.
Brent crude marked an intraday high of US$51.91 a barrel and was at US$51.60 by 0253 GMT, up 45 cents. US crude rose 57 cents to US$49.22 after touching a peak of $49.65.
But pressure on prices that have plunged more than half since June highs remains strong, with key producers such as Opec and Russia showing no signs of cutting output despite a supply glut and as major economies in Europe and Asia struggle with slowing growth. "Sentiment towards the oil market remains negative but the lack of downward momentum in overnight trading has left bears a little nonplussed," said Michael McCarthy, chief market strategist at CMC Markets in Sydney. "We're looking for impetus to move down but the data released in the last 24 hours has been supportive of higher prices, not lower prices." Economists have sharply raised estimates for US fourth-quarter growth after the country's trade deficit shrunk in November on lower oil import costs.
US crude inventories fell 3.1 million barrels compared with analyst expectations for an increase of 880,000 barrels, data from the Energy Information Administration showed on Wednesday.
The data also showed that gasoline and distillate fuel stocks soared by the most ever last week, rising more than 19 million barrels as a global crude oil surplus begins to translate into swelling fuel inventories.
Technical analysis of oil price charts showed that the contracts have been oversold, McCarthy said, but the breach of several price resistance levels in past sessions has made it difficult for traders to predict where prices may find their next level of support.