Oil prices edged up on Thursday, supported by a report of another fall in U.S. crude inventories as well as a weaker dollar, although a glut of refined products and economic growth concerns continue to drag on markets.
International Brent crude oil futures were trading at $48.96 per barrel at 0712 GMT on Thursday, down from a morning high of $49.17 per barrel but 17 cents above their last settlement. U.S. West Texas Intermediate (WTI) crude was at $47.67 per barrel, up 24 cents from its last close.
Traders said that a report of a reduction in available U.S. crude oil stockpiles was the main price driver.
The American Petroleum Institute (API) said its data showed U.S. crude stockpiles fell by 6.7 million barrels last week, declining for a seventh week in a row.
Analysts also pointed to a lower U.S. dollar.
“Oil prices also rose, with a weaker U.S.-dollar making commodities priced in the currency more attractive,” ANZ bank said.
However, traders warned that an economic slowdown and a refined product glut were weighing on oil markets.
“Demand remains a concern, as both spot and forward demand are indicating… weakness,” said commodities brokerage Marex Spectron.
Asian crude demand is slowing and by some measures falling, and many market participants suspect it is not just a seasonal phenomenon, but also due to an economic slowdown and perhaps even more permanent structural changes.
“Growth is slipping again…, and things don’t seem quite so rosy. Exports continue to disappoint and may weaken again once the ripples from Brexit reach Asia’s shores,” HSBC said in a note to clients.
German industrial output plunged unexpectedly in May for its steepest monthly drop since August 2014, data showed on Thursday, suggesting Europe’s largest economy lost steam in the second quarter after a surprisingly strong start to the year.
Output was down 1.3 percent on the month, data from the Economy Ministry showed, below the consensus forecast in a Reuters poll for an unchanged reading.
On the supply side, Libyan officials said oil export terminals that have been shut since 2014 could open again soon, potentially restoring 600,000 barrels per day of crude export capacity.