Singapore: Oil held steady on Thursday, as a rise in US fuel stocks countered a fall in crude, while fears over supply disruptions in the Middle East and Nigeria were balanced by the dim outlook for the world’s largest economy.
US crude rose three cents to $95.70 a barrel by 0529 GMT, after falling by 66 cents a day earlier. London Brent crude gained three cents to $94.40.
“The market is pretty mixed right now. It’s a fine balance between bullish and bearish factors and most players seem to be waiting for some firm direction,” said Tetsu Emori of Japan’s Astmax Futures Co Ltd.
The US Energy Information Administration said that crude inventories tumbled by 6.8 million barrels last week to 282.8 million barrels, the lowest level since October 2004.
However, gasoline supplies jumped 5.3 million barrels and distillates rose 1.5 million barrels, far exceeding analyst expectations. Heating oil stocks dropped by 2.3 million barrels.
Rising geopolitical tensions in Iran and Nigeria also lent support.
US President George W. Bush warned of “serious consequences” after Iranian boats made aggressive manoeuvres towards three American naval ships in the Straits of Hormuz, a major oil shipping route. Iran accused Washington of trying to stir up tension in the region.
In Nigeria, unknown gunmen attacked six oil industry vessels on the channel leading to the country’s largest oil and gas complex on Bonny Island, after warnings a day earlier that militants were targetting a major offensive at its oil infrastructure.
The bullish sentiment were reined in by fears that the US might plunge into recession amid rising unemployment figures and a contraction in the economy for the fourth quarter.
Fuelling the fears, investment bank Goldman Sachs said it expected the US economy to fall into recession this year, with the real gross national product contracting by 1% on an annualised basis in the second and third quarters.
OPEC President Chakib Khelil said the oil-producing group is closely monitoring the US situation, expecting demand and prices to be affected if the malaise reached global proportions. “We are closely following with interest the evolution of this crisis which could, if it comes to affect Europe and the rest of the world, bring about a decline in the development of the world economy,” Khelil said.