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Oil steadies as US crude stocks draw but fuel inventories rise
[NEW YORK] Oil futures steadied on Wednesday after US government data showed a drawdown in domestic crude stocks but rises in refined product inventories, while lingering worries about the global economy weighed on the market.
Brent crude futures rose 27 cents to settle at US$60.30 a barrel, down from a session high of US$61.41.
US West Texas Intermediate (WTI) crude fell 45 cents to settle at US$55.68 a barrel, after hitting US$57.13 a barrel.
Prices pared gains after data from the Energy Information Administration showed bigger-than-expected builds in US fuel inventories last week. Petrol stocks rose by 312,000 barrels, while distillate supplies grew by 2.6 million barrels.
Crude stockpiles decreased 2.7 million barrels, a bigger drawdown than the 1.9 million barrels that analysts had forecast.
"Both petrol and distillate apparent demand remains anemic with little improvement expected before years end," said Jim Ritterbusch, president of Ritterbusch and Associates.
Tensions between the United States and Iran remained in focus. Iranian President Hassan Rouhani said that if Iran's oil exports are cut to zero, international waterways would not have the same security as before, cautioning Washington against tightening pressure on Tehran.
The comment coincided with a remark by Iranian Foreign Minister Mohammad Javad Zarif that Tehran might act "unpredictably" in response to US policies under President Donald Trump.
Uncertainty over the global economic outlook amid the US-China trade war weighed on the market.
"Crude oil remains stuck, with the relief rally in recent days not removing the fear that recession risks could still send the market lower again," said Ole Hansen, head of commodity strategy at Saxo Bank.
Traders were also watching this week's annual US central bank seminar in Jackson Hole, Wyoming, where comments from Federal Reserve chief Jerome Powell will be in focus.
"Market players continued to fret over recession fears and sluggish oil demand forecasts," said Stephen Brennock of oil broker PVM. "A reprieve, however, may be on the cards tomorrow ... expectations are running high that hints of impending monetary stimulus will be plentiful."