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The focus turned to last week's drawdown in U.S.
crude stockpiles and spot demand for crude oil in Asia,
sidestepping questions surrounding U.S. production growth and
shaky economic data globally.
"There are a lot of movements...but the strength in Asia is
starting to filter through," said Amrita Sen, chief oil analyst
with Energy Aspects.
June Brent crude <LCOc1> was trading 39 cents higher at $67.20 a
barrel as of 1139 GMT (7.39 a.m. EDT), after trading as low as
$66.32. U.S. crude <CLc1> for June delivery, at $60.60, was 10
cents higher, after touching $59.82.
Despite this, lingering oversupply led some to question prices
that are still within touching distance of the 2015 highs
reached last week.
While crude stocks in the United States fell for the second
week, by 2.2 million barrels, following four months of steady
gains, stockpiles were still almost 90 million barrels higher
than this time last year. [EIA/S]
"One thing is for sure, there is no prospect of a global oil
supply shortage in the foreseeable future," said Tamas Varga of
PVM.
A surprise increase in output in the No. 2 U.S. oil-producing
state, North Dakota, in March added to supply concerns. The
International Energy Agency also warned on Tuesday that the
global oil glut is building.
Global demand growth for fuels was also in question, with
uncertain economic indicators pulling crude oil lower during
earlier trading.
China, the world's top energy consumer, saw its economy losing
more steam in April despite easier monetary policy, while
Europe's largest economy, Germany, slowed in the first quarter.
In the United States, retail sales were flat in April, dampening
hopes of a sharp rebound in growth in the second quarter.
Still, the market remained split as speculative bets on higher
prices looked to a weaker dollar, which makes commodities
purchased in the currency more affordable elsewhere, as well as
drawdowns in U.S. stockpiles of diesel and gasoline in advance
of the summer driving season.
"The jury is still very much out as to whether the current price
level of $65-$70 a barrel in Brent is a true reflection of the
global supply/demand balance," Varga said.
(Additional reporting by Florence Tan in Singapore, Editing by
Vincent Baby)
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