Oil wavers despite US crude draw

Oil remained near USD 50 per barrel on Thursday despite a report that showed declining US crude stocks the previous day, reflecting concerns about OPEC’s production cut extension last week.

At 1:29 pm in London, Brent crude futures for August delivery were down USD 0.10 to USD 50.66 per barrel, after losing about 3% the previous day.

The American Petroleum Institute’s Wednesday report, which showed that US commercial crude stocks had declined by 8.7 million barrels last week, was offset by news that OPEC production had risen in May on increased output from Libyan oilfields.

“Sentiment is very poor and yesterday’s survey from Reuters regarding OPEC production in May added to the skepticism about OPEC’s capability to rebalance the market as quickly as hoped for,” Carsten Fritsch, a Commerzbank analyst, told Reuters.

The markets also remained jittery on news about increasing Saudi-Russian energy co-operation, which a separate Reuters report on Thursday described as a “new oil order.” Despite its vows to participate in driving oil prices down, Russia is preparing to boost its crude output back to more than 11 million bopd, or pre-production cut levels, next year, the agency also reported.