Tokyo - Brent oil stayed below $30 a barrel as prices remained weak in Asia on Thursday after US crude and fuel inventories rose, adding further anxiety over a global supply glut.
Hopes for a rebound from the oil price freefall were dashed following the latest report which showed another increase US stockpiles of 200 000 barrels in the week ending January 8.
More significant in the US Energy Information Administration (EIA) report was an 8.2 million barrel surge in gasoline inventories, and a 6.1 million barrel rise in distillate stocks.
This suggests very sluggish consumption in the United States, the world's top oil consuming nation.
The US benchmark, West Texas Intermediate for delivery in February, was up 12 cents at $30.60, while Brent crude for February was trading 41 cents lower at $29.90 a barrel at around 03h25 GMT.
The EIA cut its global oil demand forecast to 95.19 million barrels a day this year, down from 95.22 million in its December outlook, while raising its forecast for global production.
“Oil prices continued trending downwards this week amid persistent concerns on global oversupply,” Sanjeev Gupta, who heads the Asia Pacific oil and gas practice at professional services firm EY, told AFP.
Oil prices “won't see much recovery this year amid a supply glut”, added Bernard Aw, market strategist at IG Markets in Singapore.
He noted that the EIA report expects that supply will continue to outpace demand this year and inventories will keep rising before becoming more balanced next year.
“As a result, oil prices should continue to remain low, where a sustained pick up is expected only in the third quarter of 2017,” he said in a market commentary.
The market will be closely watching China's gross domestic product data to be released early next week, according to Gupta.
China, the world's second-biggest economy and the top energy consumer, is experiencing a slump in its economic growth and has recently been hit by turmoil in its stock market.
The looming return of Iranian oil exports to the market after Iran meets the conditions of its nuclear deal with major powers also hangs over sentiment. Tehran said it expects the final implementation of the deal by Sunday.
AFP