Oil markets were steady to lower on Wednesday after a report of rising US fuel and crude inventories underscored the concern that a three-year supply glut is far from over.
Brent crude futures were at $46.67 a barrel at 3.29am GMT, close to their last close.
US West Texas Intermediate (WTI) crude futures were down 8c, or 0.2%, at $44.16 a barrel.
Oil had recovered some ground over the past week after falling nearly 20% since mid-May, but a report by the American Petroleum Institute (API) showed that US crude inventories rose by 851,000 barrels in the week to June 23 to 509.5-million, compared with analysts’ expectations for a decrease of 2.6-million barrels.
Petrol stocks rose by 1.4-million barrels even though the US summer driving season began a few weeks ago.
The US inventory gains show global supply is still ample despite the effort by oil cartel Opec to cut output by 1.8-million barrels a day between January 2017 and March 2018.
Ian Taylor, head of the world’s largest independent oil trader Vitol, said Brent crude prices would stay in a range of $40-$55 a barrel for the next few quarters as higher US production slowed a rebalancing of the market.
“Everybody was positioned for a market rebalancing and a stocks draw to happen in the second quarter. And if you look at the macro analysis, that should start happening,” Taylor said in an interview with Reuters.
“But so far it hasn’t happened and everyone has made the same mistake. Nobody has distinguished themselves,” he said.
Some analysts said that crude prices were likely to have bottomed out and would rise.
“We believe that the sell-off in crude is overdone … Brent is primed for a recovery,” BMI Research said.