Oil steady after US stockpile build, Saudi Arabia price cuts
Oil prices steadied on Thursday after falling more than 1% the previous day because of a build in U.S. gasoline and diesel inventories and cuts to Saudi Arabia's July prices for Asia.
Brent crude futures were up 15 cents, or 0.2%, at $65.01 a barrel by 0800 GMT. U.S. West Texas Intermediate crude gained 11 cents, or 0.2%, to $62.96 a barrel.
Oil prices closed around 1% lower on Wednesday after official data showed that U.S. gasoline and distillate stockpiles grew more than expected, reflecting weaker demand in the world's largest economy.
Adding to the weakness, Saudi Arabia, the world's biggest oil exporter, cut its July prices for Asian crude buyers to nearly the lowest in two months.
"While the (Saudi) decrease was smaller than anticipated, it suggests demand is soft despite entering the peak demand period," said ANZ analysts in a note.
The price cut by Saudi Arabia follows the OPEC+ move over the weekend to increase output by 411,000 barrels per day for July.
The strategy of OPEC+ group leaders Saudi Arabia and Russia is partly to punish over-producers and to wrestle back market share, Reuters has reported.
Weak U.S. economic data and ongoing developments in U.S.-China trade relations also weighed on oil prices, said independent market analyst Tina Teng.
"Simply put, a gloomy global economic trajectory dimmed the demand outlook," she said.
"Markets are cautiously watching for any progress in trade talks between the world's two top economies."
Data on Wednesday showed that the U.S. services sector contracted for the first time in nearly a year in May.
On the trade front, U.S. President Donald Trump said on Wednesday that China's Xi Jinping was tough and "extremely hard to make a deal with", exposing friction between Beijing and Washington after the White House had raised expectations for a long-awaited Xi-Trump phone call this week.
Source: Reuters
