Oil prices recovered from six-month low points on Wednesday on bargain-hunting as traders awaited the latest insight into energy demand in the United States, the world’s biggest consumer of crude.
US benchmark West Texas Intermediate (WTI) for delivery in September gained 33 cents to $97.71 awaiting the US Department of Energy’s publication of weekly commercial energy inventories.
Brent North Sea crude gained 32c to stand at $104.93 a barrel in London afternoon deals.
Oil prices had fallen to six-month lows in New York on Tuesday on concerns about weak energy demand in the US and lacklustre Chinese economic data, traders said. WTI hit $97 a barrel – the lowest level since February 5.
Brent had on Tuesday slipped to $104.07, which was a four-month low point.
Ahead of Wednesday’s inventory data, analysts polled by the Wall Street Journal said US crude stockpiles are expected to have fallen 1.7 million barrels on average in the week to August 1.
But gasoline stockpiles are expected to have risen by 100 000 barrels, while stocks of distillates, including heating oil and and diesel, are forecast to have increased by 600 000 barrels.
Market watchers believe refineries will soon scale back output to coincide with the end of the so-called US summer driving season in early September amid an expected reduction in demand for gasoline, or petrol.
The driving season is the peak demand time for gasoline demand in the US as long road trips are taken for vacations.
Investors are also keeping a close watch on conflicts in Middle East crude producers.
Escalating violence in Libya, a member of the Opec oil-producing cartel, is threatening efforts to restore production that had been disrupted last year by rebels.
Fighting is also raging in Iraq, where jihadists have overrun much of the country’s Sunni heartland after launching an offensive from neighbouring Syria on June 10.
Iraq is the second biggest producer in the 12-nation Opec, pumping 3.4 million barrels a day and possessing more than 11% of the world’s proven reserves.
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