Oil prices steadied on Thursday after falling in the previous session when official data showed United States (US) stockpiles of products like gasoline rose sharply last week, suggesting weak demand during the peak driving season.
Brent crude futures were up 13 cents, or 0.2 per cent, at $63.80 a barrel by 0237 GMT. They fell 1.1 per cent on Wednesday.
US West Texas Intermediate (WTI) crude futures were down 1 cent at $56.77. The US benchmark dropped 1.5 per cent in the previous session.
Oil prices have fallen this week as worries over a Middle East conflict have eased, oil production in the Gulf of Mexico has resumed after a storm and worries have emerged over Chinese economic growth. The “easing of tensions between the US and Iran, mixed Chinese growth data and storm-hit operations getting back online are all pressuring oil prices downward,” said Alfonso Esparza senior market analyst at OANDA.
Japan's exports fell for a seventh straight month in June, with shipments to China falling more than 10 per cent, while Japanese manufacturers' business confidence fell to a three-year low.
On the oil supply front, data on Wednesday from the US Energy Information Administration (EIA)showed a larger-than-expected drawdown in crude stockpiles last week, but traders focussed on large builds in refined product inventories dragging prices down.
US crude inventories fell 3.1 million barrels, the EIA said, more than analysts' forecasts for a decrease of 2.7 million barrels.
However, gasoline stocks rose 3.6 million barrels, compared with analysts' expectations in a Reuters poll for a 925,000-barrel drop. Distillate stockpiles grew by 5.7 million barrels, much more than expectations for a 613,000-barrel increase, the EIA data showed.
“Gasoline consumption is painfully weak given US consumers are in peak driving season,” said Stephen Innes, managing partner at Vanguard Markets.
Crude production was disrupted last week by Storm Barry, which came ashore on Saturday in central Louisiana as a Category 1 hurricane, the first major storm to hit the US Gulf of Mexico this season.
More than half of daily crude production in the Gulf of Mexico remained offline by Tuesday, as most oil companies were re-staffing facilities to resume production.
The market shrugged of another incident involving a tanker in the West Asia amid tensions between the US and Iran.
US officials say they are unsure whether an oil tanker towed into Iranian waters was seized by Iran or rescued after facing mechanical faults as Tehran asserts, creating a mystery at a time of high tension in the West Asia.
