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Brent crude futures dipped 12 cents to $84.97 a barrel by 1227
GMT, while U.S. West Texas Intermediate (WTI) crude futures
inched down 15 cents to $78.32 a barrel. Both benchmarks have
gained over 6% so far this week.
"Relentlessly rising U.S. commercial inventories and potentially
entrenched inflation limit any immediate upside potential," said
PVM analyst Tamas Varga.
He said recovering Chinese demand and falling inflation were set
to support oil prices in the second half of the year.
Crude oil stocks in the United States rose last week to their
highest since June 2021, helped by higher production, the Energy
Information Administration said. [EIA/S]
U.S. gasoline and distillate inventories also rose last week.
U.S. Federal Reserve officials said more interest rate rises are
on the cards as the bank presses forward with its efforts to
cool inflation, sending bearish signals across risk assets like
oil and equities. [GLOB/MKTS]
But the prospect of stronger demand from China lent some support
to oil prices, as the world's second-largest oil consumer ended
more than three years of stringent zero-COVID policy.
"We expect Chinese oil consumption to increase by around 1.0
million barrels a day this year, with strong growth emerging as
early as late in Q1," analysts from ANZ bank wrote in a note.
"Overall, this should push global demand up by 2.1 million
barrels a day in 2023."
BP Azerbaijan declared force majeure on Azeri crude shipments
from the Turkish port of Ceyhan on Feb. 7, after a massive
earthquake struck Turkey and Syria early on Monday. Azeri oil
continues to flow there via pipeline, BP Azerbaijan said on
Thursday.
Brent's front-month loading contract rose to a $3-a-barrel
premium over contracts six months out, a market structure called
backwardation, which indicates traders seeing tight current
supply.
(Additional reporting by Muyu Xu; editing by Bernadette Baum and
Jason Neely)
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