Oil prices edged higher on Thursday after a drawdown in U.S. crude inventories, but lingering concerns over the global economy and a build-up in U.S. refined product stocks kept a lid on gains.
West Texas Intermediate (WTI) crude futures rose 10 cents, or 0.2%, to $55.78 per barrel.
Brent crude futures climbed for a fifth consecutive session on Thursday, rising 6 cents, or 0.1%, to $60.36 a barrel by 0242 GMT on Thursday.
U.S. crude inventories fell more than expected last week as refineries hiked production, but gasoline and distillate stockpiles showed bigger-than-expected builds, the Energy Information Administration said on Wednesday.
Crude inventories fell by 2.7 million barrels in the week to Aug. 16, compared with analysts’ expectations for a drop of 1.9 million barrels. However, gasoline stocks rose by 312,000 barrels and distillate supplies grew by 2.6 million barrels.
“Amid mounting market concerns about a slowdown in economic and oil-demand growth, it might come as a surprise that crude oil inventories have actually been plunging,” analysis firm Kayrros said in a note.
Traders were worried on the prospects of global oil demand especially amid lingering trade tensions between U.S and China, the world’s two major economies.
“If trade uncertainties persist it will be difficult for oil to shrug off concerns about the threat to global demand,” said Stephen Innes, a managing partner at Valour Markets.
U.S. President Donald Trump on Wednesday said he was “the chosen one” to address trade imbalances with China, even as congressional researchers warned that his tariffs would reduce U.S. economic output by 0.3% in 2020.
Asian shares edged ahead on Thursday after Wall Street got a boost from strong retail results, but minutes of the Federal Reserve’s July meeting showed policymakers were deeply divided over whether to cut interest rates as sharply as markets were wagering.
Meanwhile, oil markets were also supported by simmering tensions between the United States and Iran, with Iranian President Hassan Rouhani cautioning Washington against tightening pressure on Tehran.
If Iran’s oil exports are cut to zero, international waterways will not have the same security as before, Rouhani said on Wednesday.
Echoing Rouhani’s tone, Iranian Foreign Minister Mohammad Javad Zarif said Tehran might act “unpredictably” in response to U.S. policies under President Donald Trump.