Oil edges lower as supply disruption concerns ease

Oil prices drifted lower on Thursday after gaining more than $1 in the previous session, as concerns over supply disruptions eased and markets looked for evidence of improving fuel demand.

Brent crude futures dipped 7 cents, or 0.1 per cent, to $97.33 a barrel by 0642 GMT, while US West Texas Intermediate crude futures fell 9 cents, or 0.1 per cent, to $91.85.

Oil is struggling to find direction, suggesting investors have not reached a consensus on the outlook for supply and demand, analysts from Haitong Futures said.

US crude oil stocks rose by 5.5 million barrels in the most recent week, the US Energy Information Administration said, more than the expected increase of 73,000 barrels.

Gasoline product supplied rose in the most recent week to 9.1 million barrels per day, though that figure still shows demand down 6 per cent over the past four weeks compared with the year-ago period.

The premium for front-month WTI futures over barrels loading in six months’ time was pegged at $4.38 a barrel on Thursday, the lowest in four months, indicating easing tightness in prompt supplies.

The resumption of flows on the Russia-to-Europe Druzhba pipeline further calmed market worries over global supplies.

Russian state oil pipeline monopoly Transneft (TRNF_p.MM) restarted oil flows via the southern leg of the Druzhba oil pipeline. Ukraine had suspended Russian oil pipeline flows to parts of central Europe since early this month because Western sanctions prevented it from receiving transit fees from Moscow, Transneft said on Tuesday.

Meanwhile, physical oil prices around the world have begun to sag alongside futures, reflecting easing concerns over Russian-led supply disruptions and heightened worries about a possible global economic slowdown.

Monthly oil reports from the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) are expected later on Thursday.