Brent crude LCOc1 futures rose 12 cents, or 0.19%, to $63.38 a barrel by 0542 GMT. The international benchmark rose more than 1% in the previous session, following Iran’s seizure of a British tanker last week that stoked fears of supply disruptions from the energy-rich Gulf.
West Texas Intermediate (WTI) crude CLc1 futures were up 7 cents at $56.29 per barrel.
“Downward revisions on global oil demand, along with rising challenges in the macroeconomic environment, have capped bullish gains for oil prices,” said Benjamin Lu Jiaxuan, commodities analyst at Singapore-based Phillip Futures.
Meanwhile, the IEA said it was closely monitoring developments in the Strait of Hormuz as relations between Iran and Britain remain tense.
“The IEA is ready to act quickly and decisively in the event of a disruption to ensure that global markets remain adequately supplied,” it said, adding that executive director Fatih Birol has been in talks with IEA members, associate governments and other nations.
The oil market is currently well supplied, with oil production exceeding demand in the first half of 2019, pushing up global stocks by 900,000 barrels per day, the IEA said in a statement.
That comes against the backdrop of the Organization of the Petroleum Exporting Countries (OPEC) and some non-affiliated producers, including Russia, withholding supplies since the start of the year to prop up prices.
The potential for disruption in the Middle East has come amid a more fundamental souring of market sentiment in recent days, with hedge funds, producers and traders all taking a more bearish tack in response to what they see as weakness in worldwide demand.
“I’m struggling to identify a clear direction at the moment but, I’m becoming increasingly bearish due to non-OPEC supply and softening global demand,” said Harrison Fleming, research analyst at Frame Funds in Sydney.
“I don’t see any resolution to the Middle East tensions in the near term...I do see this theme providing more of an excuse for oil to remain trading in a range for the next month or two,” Fleming said.
