Oil regains ground following sharp loss

OIL EDGED higher on Thursday, regaining ground from sharp losses the previous day brought on by an unexpectedly large rise in US stocks of refined fuels.

Brent crude futures traded 52 cents higher at $61.74 a barrel. US West Texas Intermediate (WTI) crude futures were at $56.35 a barrel, up 39 cents.

The previous day, Brent had settled 2.6 per cent lower, and WTI 3 per cent lower, after an unexpected rise in US fuel stocks.

Data from the Energy Information Administration (EIA) showed that US crude oil inventories fell by 5.6 million barrels in the week to December 1, to 448.1 million barrels, putting stocks below seasonal levels in 2015 and 2016.

But gasoline stocks rose by 6.8 million barrels, well above the 1.7 million-barrel gain analysts had expected, and distillate stocks, which include diesel and heating oil, rose 1.7 million barrels.

“It was a sharp correction yesterday, so it’s a bit of a pause today,” said Olivier Jakob, managing director of PetroMatrix, adding “technically, it’s still very weak.”

PVM Oil Associates also said in a note that “the weekly data was not as bad as it seems at first sight”.

The market was also underpinned by a threat from one of Nigeria’s main oil unions to go on strike from December 18 over what it said was a “mass sacking of workers”. The country is Africa’s top oil exporter.