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Oil slips as investors weigh up supply factors

Reuters  |  LONDON 

By Browning

LONDON (Reuters) - Oil fell on Thursday after data showing a rise in U.S. inventories weighed on sentiment already rattled by the global economy, though prices were buoyed by the prospect that supply could fall short of global demand.

Brent futures were last down 50 cents, or 0.8, at $62.19 a barrel by 1310 GMT.

U.S. crude futures were down 75 cents, or 1.39 percent, at $53.26.

"WTI and Brent both remain rangebound following a failed attempt to move higher," said Ole Hansen, of commodity strategy at

"Supply fundamentals have increasingly been turning supportive in recent weeks, but against this the market still worries about the yet-to-be-realised - if at all - impact on demand from weaker macroeconomic fundamentals."

Though the published robust jobs data last week, global markets remain nervous after reported the lowest annual economic growth in nearly 30 years in January. That focuses yet more attention on the outcome of U.S.-talks to end a trade spat between the world's top two economies.

The also came under pressure as weekly data published by the on Wednesday showed an unwelcome increase in stocks of

Some analysts, however, were relieved that U.S. rose by only 1.3 million barrels in the week to Feb. 1, against expectations for an increase of 2.2 million barrels.

A decline in OPEC production and a squeeze on supply from and from U.S. sanctions have led many analysts to forecast that the market will be balanced in 2019.

The is showing a 20 percent gain so far this year.

Further price support is provided by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) to tighten the market.

Saudi Arabia, the world's top oil exporter, told OPEC it had pumped 10.24 million barrels per day (bpd) in January, two OPEC sources told Reuters, exceeding requirements agreed in the supply pact. The kingdom pumped 10.643 million bpd in December.

"We believe that financial markets may be overestimating the risks of a global recession," said Jean-Pierre Durante, of Applied Research at Pictet Wealth Management.

"Moreover, - prices were between 14 percent and 18 percent lower in January than their 2018 average - are likely to stimulate economic activity and oil demand, particularly in emerging markets."

Meanwhile, U.S. sanctions against Venezuela's are expected to freeze sales proceeds of Venezuelan crude exports to the

(Additional reporting by in Londong and Henning Gloystein in Singapore; Editing by and David Goodman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, February 07 2019. 19:12 IST