Oil prices rose on Friday following three days of declines on worries about excess supply and slowing demand in the US, though prices are set for a second weekly loss.
Brent crude futures rose 65 cents, or 1.03 per cent, to $64.03 a barrel at 0745 GMT. US West Texas Intermediate crude was at $60.08 a barrel, also up 65 cents, or 1.09 per cent.
Brent and WTI are set to fall about 2 per cent this week, down for a second straight week, as major global producers increase output.
The price drop is driven by a surprise 5.2 million-barrel US inventory build that reignited oversupply fears, IG Markets analyst Tony Sycamore said.
“This has been amplified by risk-aversion flows, bolstering the dollar and the ongoing US government shutdown, which continues to cloud economic activity,” he added.
US crude stocks rose more than expected on higher imports and reduced refining activity, while gasoline and distillate inventories declined, the Energy Information Administration said on Wednesday.
Oil prices were also pressured by concerns about the effects of the longest government shutdown in the history of the US on the broader economy.
The Trump administration has ordered flight reductions at major airports due to a shortage of air traffic controllers, while private reports are pointing to a weaker US labor market in October.
The Organisation of the Petroleum Exporting Countries and its allies, also known as OPEC+, decided on Sunday to increase output slightly in December. However, the group also paused further increases for the first quarter of next year, wary of a supply glut.
After the decision, Saudi Arabia – the world’s top exporter – sharply reduced prices for its crude for Asian buyers in December, in response to a well-supplied market.
European and US sanctions on Russia and Iran are also disrupting supplies to the world’s largest importers, China and India, providing some support for global markets.
On Thursday, Swiss commodity trader Gunvor said it had withdrawn its proposal to buy the foreign assets of Russian energy company Lukoil after the US Treasury called it Russia’s “puppet” and signaled Washington opposed the deal.
“Gunvor scrapping its Lukoil assets purchase suggests the US is maintaining its maximum pressure campaign against Russia, and potential strict enforcement of sanctions on Rosneft and Lukoil,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
“The support is fragile … the oversupply narrative will likely creep back as the key influence on sentiment,” she added.
Crude imports of China, the world’s largest oil importer, in October were up 2.3 per cent from September and up 8.2 per cent from a year earlier at 48.36 million tons, data from General Administration of Customs showed, amid high utilisation rates at the country’s refineries.
