An aerial drone take in of a crude oil storage facility on April 23, 2020 in Cushing, Oklahoma.
Tom Pennington | Getty Images
Oil prices steadied on Thursday as materials showed China’s crude imports rebounded, but market watchers expect gains to be capped by the glut in supplies as the coronavirus pandemic pounds global fuel demand.
Brent crude was up by 3 cents, or 0.1%, to $29.75 a barrel 0341 GMT, after dropping 4% on Wednesday.
U.S. West Texas Midway futures gained 4 cents, or 0.2%, to 24.03 a barrel, after declining more than 2% in the previous conference.
Both contracts traded in an out of negative territory through the Asian morning on light trade with some supermarkets on holiday.
Oil prices were supported by data showing Chinese crude imports rose last month. Thrusts climbed to 10.42 million barrels day (bpd) in April from 9.68 million bpd in March, according to Reuters calculations meant on customs data for the first four months of 2020. Overall exports from China also rose against prospects of a sharp drop.
“Oil prices should eventually settle on a wide $10 range, with WTI crude’s upper limits being around the $30 a barrel level, while Brent crude targets the $35 a barrel level,” broke Edward Moya, senior market analyst at OANDA.
While prices have risen since late April as some sticks have started easing lockdowns put in place to combat the worst pandemic in a century, oil continues to be pumped into storage, departure a massive mismatch between demand and supply.
U.S. crude inventories were up for a 15th straight week last week, push by 4.6 million barrels, the Energy Information Administration said on Wednesday.
That was less than analysts had forewarning in a Reuters poll, which suggested a 7.8 million-barrel rise, but the gain highlighted once again how much hoard is being stored. Distillate inventories also rose sharply.
Gasoline stocks, however, fell for a second week as some U.S. holds eased lockdowns that had sharply hit traffic.
“The latest report (on U.S. inventories) added to tentative evidence that — after a catastrophic few weeks — the squeezing on the U.S. oil market is beginning to lessen,” Capital Economics said in a note. “That said, we wouldn’t rule out more turbulence in the get about weeks.”
There are also signs that some oil producers are struggling to comply with an agreement between the associates of the Organization of the Petroleum Exporting Countries (OPEC) and other suppliers, including Russia, to cut output by a record amount.
Iraq, OPEC’s second-largest manufacturer after Saudi Arabia, has not yet informed customers of impending restrictions on its oil exports.
OPEC and allied producers — a grouping separate as OPEC+ — agreed to cut production from May 1 by around 10 million bpd to stabilize prices amid the plunge in requisition in economies ravaged by the coronavirus outbreak.