BEIJING: Brent crude held steady above $56 a barrel on Wednesday, and US crude rose briefly more than $1, after a smaller-than-expected rise in US crude stocks was viewed by some as a sign that a supply glut was starting to abate.
The gains in futures, however, were capped by a warning from the International Energy Agency (IEA) that ample global production would still swell world inventories before investment cuts begin to significantly dent output.
“The supply growth in 2015 is likely to continue unabated, albeit at a somewhat lower rate,” Fereidun Fesharaki at Facts Global Energy said in a note on Wednesday.
“This all means a weak market in 2015 and even lower oil prices. Demand rebound will not save the oil market,” he said.
Brent March crude futures had ticked up 28 cents to $56.71 by 0557 GMT, after losing $1.91 during the previous session on the IEA expectations.
US March crude futures were trading up 52 cents at$50.54, after falling $2.84 in the previous session.
Oil prices are expected to test support levels, with Brent crude showing a good chance of breaking below $56.21, while US crude could potentially break below $49.88, according to Wang Tao, a Reuters market analyst.
US crude stockpiles last week rose less than half of what analysts had expected as refineries cut output, data from industry group the American Petroleum Institute (API) showed after the oil market settled on Tuesday.
US crude stocks rose by 1.6 million barrels in the week to Feb. 6, the API said, compared with expectations for an increase of 3.7 million barrels.
