Oil steady as investors weigh supply and demand drivers

Oil steady as investors weigh supply and demand drivers

Oil prices were little changed in early Asia trade on Thursday as investors weighed demand concerns over a global economic slowdown against an expected fall in supply from Saudi output cuts.

Brent crude futures dipped 1 cent at $76.94 a barrel at 0110 GMT, while the U.S. West Texas Intermediate crude futures rose 5 cents at $72.58 a barrel.

Both benchmarks settled up by about 1% on Wednesday, supported by Saudi Arabia's plans for deep output cuts, though price gains remain capped by rising U.S. fuel stocks and weak Chinese export data.

"We considered substantially lowering our oil price deck in the absence of OPEC+ action last Sunday, but even a 1 million barrel/day cut looks unlikely to underpin a sustainable price increase," Citi analysts said on Thursday.

"Both OPEC and IEA forecasts have had an air of wishful thinking about accelerating demand growth by year-end," the analysts added.

U.S. crude oil stockpiles fell last week, though fuel product inventories grew, the latest data from Energy Information Administration (EIA) showed on Wednesday.

Gasoline inventories climbed by 2.7 million barrels in the week, the EIA said, higher than analyst expectations for a 880,000 barrel rise.

Distillate stockpiles rose by nearly 5.1 million barrels in the week, exceeding analyst predictions of a 1.3 million barrel rise.

The larger-than-expected build in U.S. fuel inventories raised concerns over demand from the world's top oil consumer, especially as travel was expected to have grown more during the Memorial Day weekend.

Meanwhile, U.S. crude inventories fell by 451,000 barrels in the week, while analysts had expected a 1 million barrel rise.