By Amanda Cooper
LONDON (Reuters) - Oil steadied on Thursday as growing expectations that global supply could fall significantly short of demand this year lent support, offsetting the negative impact of a rise in U.S. inventories.
Brent crude oil futures were last down 12 cents at $62.57 a barrel by 1022 GMT, while U.S. crude futures were down 7 cents at $53.94 a barrel.
Still, some analysts were relieved that U.S. crude oil inventories only rose by 1.3 million barrels in the week to Feb. 1, according to the EIA, compared with expectations for an increase of 2.2 million barrels.
"The weekly report from the EIA on U.S. oil stocks was bullish for outright prices, plain and simple. The large draws in distillate ... made sure that commercial oil inventories fell for the second week, this time by 3.4 million barrels," he said.
"Additionally, the builds in crude (+1.3 million bbls) and gasoline stocks (+0.5 million bbls) were less than anticipated."
U.S. distillate stocks fell by 2.3 million barrels, while inventories of other refined fuels dropped by 2.9 million barrels.
The oil price is still showing a 20 percent gain so far this year, but has struggled to return to the near-four year highs of late 2018, given the concern that a slowing global economy could eat into fuel demand, with German industrial output unexpectedly falling in December for the fourth consecutive month.
"We believe that financial markets may be overestimating the risks of a global recession. Moreover, lower oil prices - 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," said Jean-Pierre Durante, Head of Applied Research at Pictet Wealth Management.
Providing global markets with price support are supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) aimed at tightening the market.
(Additional reporting by Henning Gloystein in Singapore; Editing by Susan Fenton)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)