SINGAPORE: Oil prices eased in Asian trade Thursday on a mixed US inventory report indicating tepid demand, while expectations of a return of Libyan supplies also weighed, analysts said.
New York’s main contract, West Texas Intermediate (WTI) for January delivery, was down four cents at $97.40 in mid-morning trade while Brent North Sea crude for January eased 20 cents to $109.50.
The US Department of Energy (DoE) reported that US crude inventories fell 10.6 million barrels in the week ending December 6, almost five times the 2.5 million barrel decline estimated on average by analysts polled by Dow Jones Newswires.
But the drop in crude stocks, the second consecutive drawdown after a 10-week run of rises, was offset by bigger-than-expected increases in gasoline and distillates, weighing on the WTI contract.
Gasoline supplies rose 6.7 million barrels and distillates, which include diesel and heating fuel, gained 4.5 million barrels.
“Weak downstream demand for refined products would signal possible sluggish demand for crude oil as a feedstock going forward,” Singapore-based Phillip Futures said in a note.
It added that oil prices were also hit by investors betting that the stockpiles drawdown was only temporary. The official weekly DoE inventory report is seen by traders as a key indicator of the strength of demand in the US, the world’s top crude consumer.
Analysts said oil prices were also pressured after a tribal chief in crude producer Libya announced that a months-long blockade by armed protesters of vital oil terminals would be lifted on December 15.
The protests as well as blockades of fuel deliveries by the Berber minority have slashed Libya’s oil output to about 250,000 barrels per day from normal levels of nearly 1.5 million.