Singapore: Oil was steady under $43 a barrel on Thursday, after surging more than 6% overnight on US government data that showed a larger-than-expected drop in gasoline stocks as demand rose on cheaper prices.
To see how demand is likely to look going forward in the world’s top oil consumer, the market will eye US January durable goods orders and weekly jobless claims, due later on Thursday and likely to reflect slumping business investment and rising unemployment.
US crude for April delivery was up 16 cents to $42.66 a barrel by 12:45am, after rising $2.54 on Wednesday. London Brent crude gained 23 cents to $44.52.
Oil’s gains were spurred by US Energy Information Administration data showing gasoline stocks fell 3.4 million barrels in the week to 20 February, against a forecast for just a 100,000-barrel draw.
“Inventories in the US have gone down for two weeks in a row - it looks like the worst is probably over as far as the US is concerned, but it’s really the economy, the economy, the economy,” said Anthony Nunan, risk management executive at Tokyo-based Mitsubishi Corp.
The data also showed a 1.7% rise in US gasoline demand over the four weeks ending 20 February, as low gasoline prices lured US motorists back on the roads.
This helped oil shrug off a drop in equities markets, with European shares hitting a new six-year low. US stocks also fell, after US President Barack Obama’s first address to Congress shed little new light on how he plans to stabilise the economy and shore up banks.
Data showing that sales of previously owned US homes plunged in January and prices hit a six-year low also weighed on shares.
Oil has received support from reports earlier this week of high compliance by members of the Organization of the Petroleum Exporting Countries with deep production cuts agreed last year to stem the slide in oil.
Venezuelan Finance Minister Ali Rodriguez, a former president of Opec, said the Opec nation expected to propose new output cuts when the group next meets in March.
Global energy consumption has collapsed as the financial crisis has thrown most major economies into a recession, prompting oil prices to tumble nearly $110 since peaking in July.