U.S. oil prices fell on Thursday after an industry report showed a surprise build in the country’s crude inventories, while Brent futures came off early lows to trade marginally higher.
U.S. benchmark West Texas intermediate (WTI) futures were down 20 cents, or 0.37 percent, at $53.86 per barrel as of 0354 GMT after settling 16 cents higher at $54.06 in the previous session.
Brent futures were 3 cents, or 0.05 percent, higher at $56.25 a barrel after falling 21 cents in early trade. They had settled 13 cents higher at $56.22 in the previous session.
Trade is expected to remain thin for the rest of the week as most investors are away for year-end holidays, although the expiry of the front-month February ICE Brent contract on Thursday could see some activity in the contract.
“Most investors have vested interest to keep prices high because it looks nice on the balance sheet when books close at the end of the year,” said a Singapore-based trader.
Data released by the American Petroleum Institute (API) late on Wednesday showed a 4.2 million barrel build in U.S. crude stocks in the week to Dec. 23, while analysts polled ahead of the weekly inventory reports had forecast, on average, that inventories would decline 2.1 million barrels.
Meanwhile, a committee of OPEC (Organization of the Petroleum Exporting Countries) and non-OPEC producers responsible for monitoring compliance with a production cut agreement will meet in Vienna on Jan. 21-22, Kuwaiti oil minister Essam Al-Marzouq told state news agency KUNA, in a sign that the output cut deal is likely to be adhered to.
“Brent will be more positively impacted by the OPEC and non-OPEC cuts should the agreed reductions be largely adhered to over the next six months,” said Philips Futures’ investment analyst Jonathan Chan.
“WTI-Brent Spread will continue to widen should the OPEC and Non-OPEC market rebalancing initiative works out and North American Shale production continue to pick up,” Chan added.