- U.S. crude oil inventories drop 9.2 mln barrels -API
- Libya output dip supports Brent
- High global supplies still weigh on market
- U.S. gasoline demand already peaking -Woodmac
- China gasoline demand to top out around 2025 -CNPC
Oil prices edged up on Wednesday, lifted by declining U.S. crude inventories, although markets were still restrained by excess supply.
Market focus was turning to the release of official U.S. Energy Information Administration data later on Wednesday for a further update on inventories.
Brent crude futures were at $51.14 per barrel at 1010 GMT, up 34 cents, or 0.66 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $47.82 a barrel, up 27 cents, or 0.56 percent.
U.S. crude inventories fell by 9.2 million barrels in the week to Aug. 11 to 469.2 million, industry group the American Petroleum Institute said on Tuesday.
That compared with analyst expectations for a decrease of 3.1 million barrels.
“The market took this as a mildly bullish report,” said William O’Loughlin of Australia’s Rivkin Securities.
If the API data is confirmed by the U.S. government later on Wednesday it would represent a seventh consecutive week of a decline in stocks, one of the key metrics for OPEC and other oil producers which have curtailed output to boost prices.
A dip in Libyan output due to security breaches at a major field was also supporting Brent.
More broadly, analysts said ample supplies were preventing prices from moving much higher.
“Excessive supply … is continuing to weigh on oil prices … Not a lot has changed despite the OPEC and Russia efforts recently. While these producers have tried to limit their oil output, U.S. shale oil continues to rise,” said Fawad Razaqzada, an analyst at futures brokerage Forex.com.
The Organization of the Petroleum Exporting Countries together with non-OPEC producers such as Russia have pledged to restrict output by 1.8 bpd between January this year and March 2018.
Offsetting much of that effort, however, U.S. oil production has soared by almost 12 percent since mid-2016 to 9.42 million bpd.
“OPEC and Russia still face an uphill battle in reducing the global supply surplus in the face of growth in output elsewhere and less than compliant behavior in their midst (Iraq, UAE),” said French bank BNP Paribas.
On the demand side, analysts see a gradual slowdown in fuel consumption growth.
In the United States, energy consultancy Wood Mackenzie said gasoline demand was already peaking due to improving fuel efficiency and the rise of electric vehicles.
In China, state-owned China National Petroleum Corporation (CNPC) said gasoline demand would likely peak around 2025 and outright oil consumption would top out around 2030.
This means that oil demand from the world’s two biggest consumers may soon stall, while consumption has already peaked in Europe and Japan.