Oil prices edged up in Asia Thursday after slumping for five-straight sessions to a three-month low after a surprise jump in US stockpiles built on increasing worries about a global supply glut.
US energy department data showed Wednesday that inventories were 13.4 percent higher on-year, while gasoline stocks were up 11.8 percent, indicating demand remains weak as the peak holiday driving season comes to a close.
The news sent Brent tumbling three percent and West Texas Intermediate more than two percent down to sit at levels not seen since April, with both contracts now down about a fifth from their 2016 highs above $50 early last month.
On Thursday bargain-buyers moved in, helped by a weaker dollar after the the Federal Reserve indicated any US interest rate increase would be slow and measured.
At about 0630 GMT, US Benchmark West Texas Intermediate was up six cents to $41.98 a barrel while North Sea Brent was up five cents at $43.52.
“There is still a surplus and the oil price is going to have difficulty sustaining any rally because of that,” David Lennox, an analyst at Fat Prophets in Sydney, told Bloomberg News.
“We’re now heading toward the end of the drive season and the market is probably going to weaken further. The $40 a barrel level looks like the base at the moment.”
Prices fell to near 13-year lows below $30 a barrel in February, hit by an oversupply, tepid global growth, low demand and worries over China’s slowing economy.