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 Crude oil stocks in the United States rose by 2.5 million barrels
last week to above the five-year seasonal average, according to data
from the Energy Information Administration (EIA), trumping
expectations for a drop of 2.3 millions.
U.S. September crude futures were 3 cents lower at $49.16 by 0620
EDT, having fallen by $1.67 on Wednesday to settle below $50 for the
first time since April.
Brent crude was down 11 cents at $56.02 a barrel.
The price of Brent has fallen by about 12 percent in July, its
largest monthly fall since March, pummelled by concern about the
ability of the global economy to absorb a surplus of oil.
The oil glut looks set to grow as an Iranian nuclear deal with the
West is expected to release millions of barrels of additional supply
on world markets.
"The bears are still in control of the market," PVM energy analyst
Tamas Varga said.
"A close below ($55.60 for Brent) is a sell and, in that case, there
is nothing really that could stop this contract from falling down to
$53.19, the daily low in the August contract on Jan. 13," Varga
added.
Still, OPEC delegates from Gulf states and other nations say that
the recent drop in prices is likely to be short-term. They say that
lower prices will not deter the cartel from keeping output high to
defend market share.
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The dollar headed for its first weekly loss in a month but held near
a three-month high, which tends to make it more profitable for non-U.S.
investors to sell dollar-denominated assets such as oil or gold.
"Fundamentally, there's not a lot to change the picture dramatically
in the short term. Prices seem to be contained in a range for now,"
said Ben Le Brun, market analyst at OptionsXpress in Sydney.
Volatility in the oil price has calmed this week. Brent has seen a
difference of only $1.54 between this week's intraday high and low,
the narrowest range since the last week in 2013.
(Additional reporting by Christopher Johnson in London and Jacob
Pedersen in Singapore; Editing by David Goodman)
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