Oil prices moved slightly in early Asian trading, Thursday, as expectations of tight supplies due to production cuts in Saudi Arabia and Russia and a larger-than-expected decline in US crude stocks were offset by fears of a slowdown in demand recovery in China.
Brent crude futures fell by 0.34% to $76.69 a barrel, after rising 0.5% at settlement the previous day.
US West Texas Intermediate crude also fell by 0.13% to $71.70 a barrel, after closing Wednesday, up 2.9% in post-holiday trading, to catch up with gains made by Brent earlier in the week.
Tatsufumi Okoshi, chief economist at Nomura Securities, told Reuters: The announcement of the Saudi supply cut and expectations of a possible additional reduction support oil prices, adding that a drop in US crude stocks more than expected also supported sentiment.
However, the upside appears to be limited by uncertainty about the pace of economic growth and recovery in fuel demand in China, he added.
US crude inventories fell by about 4.4 million barrels in the week ending June 30, while gasoline and distillate inventories rose, according to market sources citing figures from the American Petroleum Institute. Analysts had expected, in a Reuters poll, a decrease in crude stocks by about one million barrels.
Government data on US inventories is due at 1500 GMT, Thursday.
Saudi Energy Minister Prince Abdulaziz bin Salman said yesterday, Wednesday, that cooperation between the Kingdom and Russia in the oil sector remains strong within the framework of the OPEC + alliance, which will do everything necessary to support the market.
