Oil prices were mixed on Wednesday, with Brent extending the previous session’s rise, but gains were kept in check amid growing fears over the impact of a global economic slowdown on demand.
Brent added 16 cents, or 0.2 per cent, to $68.13 by 0706 GMT, reversing earlier losses and was not far off its year-to-date high of $68.69 reached last week.
U.S. crude futures were down three cents at $59.91 after spending much of the session in positive territory.
The U.S. benchmark rose 1.9 per cent in the previous session.
“We seem to have reached a state of equilibrium after the recent headline-driven choppy trading and we need to see some new impetus for price direction,’’ said Jeff Halley, Senior Market Analyst at OANDA in Singapore.
That is unlikely until a conclusion is reached on U.S.-China trade talks, he added, referring to negotiations due to restart on Thursday as the world’s two largest economies seek to end an eight-month-old trade war.
Oil rose on Tuesday as Venezuela’s main oil export port of Jose and its four crude upgraders were unable to resume operations following a massive power blackout on Monday, the second in a month.
Prices have risen more than 25 per cent this year, supported by supply curbs by the Organisation of the Petroleum Exporting Countries (OPEC) and other major producers, along with U.S. sanctions on exports from Venezuela and Iran.
But worries about demand have limited oil’s rally as manufacturing data from Asia, Europe and the United States pointed to an economic slowdown.
The American Petroleum Institute (API), a trade organisation, said late on Tuesday that U.S. crude inventories rose 1.9 million barrels in the latest week, while analysts had forecast a decrease of 1.2 million barrels.
The market was waiting to see whether weekly official figures from the Department of Energy (DoE) due later on Wednesday would confirm the API data.
Disruptions to transport and refining operations from a petrochemical fire in Houston, Texas “will weigh heavily on the next several DoE reports,’’ Stephen Schork, editor of Pennsylvania-based ‘The Schork Report’, said in a note.
Royal Dutch Shell Plc and LyondellBasell Industries cut production on Monday at their Houston-area oil refineries because of the shipping disruptions in the Houston Ship Channel.
Hedge funds and other money managers have increased bets that demand for oil will be sustained, even as the market rallied last week.