TOKYO: Oil prices rose on Thursday after U.S. inventories swelled less than expected, but market watchers predicted further gains could be capped by the ongoing glut in crude supplies as the coronavirus pandemic crushes fuel demand.
Brent crude was up by 12 cents, or 0.4%, to $29.84 a barrel 0044 GMT, after falling earlier in the Asian session and dropping 4% on Wednesday.
U.S. oil gained 19 cents, or 0.8%, to 24.18 a barrel, after declining more than 2% in the previous session.
“The latest report (on U.S. inventories) added to tentative evidence that – after a catastrophic few weeks – the pressure on the U.S. oil market is beginning to lessen,” Capital Economics said in a note. “That said, we wouldn’t rule out more turbulence in the coming weeks.”
While prices have risen sharply since late April as some countries have started easing lockdowns put in place to combat the worst pandemic in a century, oil continues to be pumped into storage, leaving a massive mismatch between demand and supply.
U.S. crude inventories were up for a 15th straight week last week, rising by 4.6 million barrels, the Energy Information Administration said on Wednesday.
That was less than analysts had forecast in a Reuters poll, which suggested a 7.8 million-barrel rise, but the gain highlighted once again how much supply is being stored. Distillate inventories also rose sharply.
Gasoline stocks, however, fell for a second week as some U.S. states eased lockdowns that had sharply hit traffic.