Oil prices remained relatively stable on Thursday, as strong expectations for winter fuel demand were offset by rising US fuel inventories and broader economic concerns.
Brent crude futures fell six cents to $76.1 a barrel, while US West Texas Intermediate crude fell five cents to $73.27.
Both crudes fell more than 1% on Wednesday due to a stronger dollar and a larger-than-expected increase in US fuel inventories. Data from the Energy Information Administration showed gasoline and distillate inventories rose last week, adding pressure on prices.
The structure of the Brent crude futures market indicates growing concerns about supply constraints amid rising demand. The premium of the first-month Brent contract over the six-month contract reached its highest level since August on Wednesday, indicating tightening supply or rising demand.
The US dollar rose further on Thursday, supported by a rise in Treasury yields ahead of President-elect Donald Trump’s inauguration on January 20. The strength of the dollar has increased pressure on oil prices, making crude more expensive for holders of other currencies.
WTI is expected to trade in a range of $67.55-$77.95 through February, according to OANDA analyst Wong, as markets await clarity on Trump’s policy agenda and potential fiscal stimulus measures from China.
In Asia, trade sources said on Thursday that Saudi crude oil supplies to China are set to decline in February after the kingdom raised official selling prices for the region for the first time in three months.