Oil futures were down slightly Thursday morning, after rising sharply in the first half of the week, as traders weighed a larger-than-expected build in U.S. oil stocks against tightening global supply.
Brent futures were down 38 cents, or 0.35%, at $108.38 a barrel, and U.S. West Texas Intermediate futures were off 58 cents, or 0.56%, to $10.65 a barrel at 0046 GMT.
Both contracts on Wednesday had shrugged off a large build in U.S. crude inventories to end the trading session roughly 4% higher. The jump in prices came as worries of more disruptions to global supply continued to rattle the market.
The International Energy Agency on Wednesday warned that from May onwards roughly 3 million barrels per day of Russian oil could be shut-in due to sanctions or voluntary embargoes.
At the same time, major global trading houses are also planning to curtail crude and fuel purchases from Russia’s state-controlled oil companies in May, Reuters reported on Wednesday.
Despite signals that global supply disruption will persist, oil stocks in the U.S. rose by more than 9 million barrels last week, the U.S. Energy Information Administration said on Wednesday, driven in part by releases from the nation’s strategic reserves. Analysts in a Reuters poll had anticipated just an 863,000-barrel build.
U.S. gasoline stocks fell 3.6 million barrels last week, far above anticipated levels, and distillate inventories also declined.
“Oil prices are looking very comfortable above the $100 level as U.S. and Chinese demand seems to be heading in the right direction,” wrote Edward Moya, a senior analyst with OANDA.