Oil edges higher for first time in three sessions

Sydney — Oil prices edged higher for the first time in three sessions on Wednesday, although concerns over the outlook for the global economy capped gains.

US West Texas Intermediate (WTI) crude futures were at $53.74 a barrel at 1.53am GMT, up 8c from their last settlement. They closed down 1.7% on Tuesday.

International Brent crude oil futures were at $62.05 a barrel, up 7c, after closing down 0.8% in the previous session.

Global economic worries have weighed on market sentiment in recent days, offsetting support from signs that global supplies are tightening.

With a nervous market, traders are focused on the US state of the union address by President Donald Trump.

“Anything out of the state of the union that hints at the US-China deal not working out, or more anti-trade rhetoric would be a negative for energy prices as demand would be lower if global growth keeps being downgraded,” said Alfonso Esparza senior market analyst at Oanda.

US sanctions on Venezuela have been viewed as supportive for prices by helping tighten global supplies. A flotilla loaded with Venezuelan oil has formed in the Gulf of Mexico, some holding cargoes bought ahead of the latest US sanctions on Venezuela and others whose buyers are weighing who to pay.

Producer cartel Opec and its allies, including Russia, agreed to production cuts effective from January to beat back supply growth.

However, US crude stocks rose last week even as refineries boosted output, while petrol and distillate stocks increased, data from industry group the American Petroleum Institute showed on Tuesday.

Crude inventories rose by 2.5-million barrels in the week ended February 1 to 448.2-million, compared with analysts’ expectations for an increase of 2.2-million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 889,000 barrels, the institute said.

Reuters