Brent crude futures were down 14 cents at $61.93 per barrel.
U.S. crude stockpiles expanded by 2.39 million barrels through June 26, a government report showed Wednesday, compared with a 2.5 million drop forecast in a Bloomberg survey.
“The pickup in activity might be illustrative of the competitiveness of the USA shale industry which, thanks to cutting costs, might have become comfortable with producing oil at prices around $60 per barrel”, said Norbert Ruecker, head of commodities research at Julius Baer.
Following a 50-65c fall on Wednesday, US-marker crude WTI was down a mere 2c at $56.94 a barrel, with analysts saying it has been testing support on the lower range of $57-62, where it has been trading since early May.
There are risks that could cause a pullback, like high USA inventory levels, greater Saudi production and a surge in USA shale production.
Most analysts say the benchmark crude is unlikely to see fresh lows this year.
“Overall, production was supported by increased output from the Gulf of Mexico”, Barclays said following the publication of the data. On the London Metal Exchange, most three-month contracts were in the green past the midway point of the session, as short seller took a breather.
Last year, USA crude prices fell from around $107 in June 2014 to near $42 in March on oversupply concerns as producers in the United States, the Organization of the Petroleum Exporting Countries and elsewhere pulled near record amounts of oil out of the ground despite lackluster world demand. The cartel’s production is close to 2.5-million barrels a day above demand, filling stocks worldwide. Both sides were grappling for a breakthrough as last-ditch talks dragged into a sixth day Thursday ahead of the Jul 7 deadline.
A final agreement to curb Iran’s nuclear program is expected to pave the way for the lifting of Western sanctions and release more Iranian crude on the oversupplied global market.
The Greek economic and debt crisis and worries over China’s commodities markets also weighed on investor sentiment, Barratt said.
