Oil prices stood steady near their highest level in about eight months, helped by industry data showing a larger-than-expected drawdown in US crude inventories and worries about attacks on Nigeria’s oil industry.
London Brent crude for August delivery was down 2 cents at $51.42 a barrel by 0108 GMT, after settling up 89 cents on June 7. It earlier touched $51.55, the highest since October 12. NYMEX crude for July delivery was up 4 cents at $50.40 a barrel, after closing up 67 cents on June 7 to settle above $50 for the first time since last July.
US commercial crude inventories fell by 3.6 million barrels last week, data from industry group American Petroleum Institute showed on June 7 after the market settlement, compared with expectations for a 2.7 million barrel draw according to a revised Reuters poll. The US Energy Information Administration (EIA) will issue official inventory numbers at 1430 GMT on June 8.
Worries about global supply disruptions also supported the market, analysts said. The southern Delta swamps in Nigeria have been hit by militant attacks on oil and gas pipelines which have brought the African nation’s oil output to a 20-year low.
Nigeria government said it will scale down a military campaign in the oil-producing Niger Delta and talk to a militant group. Nigeria’s oil output was between 1.5 million and 1.6 million barrels a day, down from 2.2 million barrels at the start of the year.
But concerns about global demand weighed on prices. The World Bank slashed its 2016 global growth forecast on June 8 to 2.4 per cent from the 2.9 per cent estimated in January due to stubbornly low commodity prices, sluggish demand in advanced economies, weak trade and diminishing capital flows.
The EIA on June 7 raised its 2016 US oil demand growth forecast, citing that demand will grow by 220,000 bpd from 140,000 bpd previously.
Japan’s economy grew faster than initially estimated in the first quarter, data showed on June 8, as capital spending fell less than was first reported, but worries remain over slow consumer spending and weak exports.
The market was waiting for China trade data due later in the day.