International Brent crude futures LCOc1 were trading at $41.85 (Sh4,245) per barrel, up a mere 5 cents from their last close, and failing to retake and maintain $42 (Sh4,261).
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USA gasoline stockpiles slid by 3.26 million barrels to 238.2 million, according to the Energy Information Administration.
Week to date, US oil prices remain down 1.7% amid concerns about a global glut.
Market intelligence firm Genscape reported that stockpiles at the Cushing, Oklahoma delivery hub for USA crude futures fell 89,071 barrels during the week to August 2, traders who saw the data said. Hedge funds, some of the biggest bulls in oil, were holding the least number of positive bets on USA crude since February, data on Friday showed. West Texas Intermediate crude futures are approximately 20 percent lower from their 2016 peaks beyond $50 a barrel scaled in early June, technically positioning it in bear market territory, as an indication of a continuing recovery in USA drilling activity shared with elevated stocks of fuel products weighed.
However, oil prices have started to edge up in European trade this morning and oil investors might be able to breathe a sigh of relief when U.S markets open later today.
State-owned Saudi Arabian Oil Co. said Sunday it will sell cargoes of Arab Light in September at $1.10 a barrel below Asia’s regional benchmark, signalling it has no plans to back down while OPEC rival Iran tries to regain market share.
Crude oil carried by rail from the Midwest to the East Coast remains the country’s largest crude-by-rail movement at 176,000 BPD, or 45% of the total crude oil moved by rail within the U.S.in May, Kallanish Energy finds.
“We might hold above $40 next week, but I doubt we will be trading at $42 when the new WTI front-month comes into play”.
Instead, Small anticipates crude to continue to trade in the US$35-$50 range for some time due to lower demand.
“The period for the market to balance out is taking longer than expected”, Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, said by e-mail.
“Gasoline stocks went down but they’re still 10 percent more than they were last year, and they normally decline at this time of year because it’s the driving season”, said Williams.
Brent crude was down 43 cents, or 1 percent, at $43.86 per barrel.
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However, if the data shows a rise in inventories, we may see another bout of selling pressure, which will push prices down to the next support levels of around $36 a barrel.
