Brent oil prices held near one-month highs on Thursday supported by China’s efforts to boost its economy, a drop in new coronavirus cases at the epicenter of the outbreak, supply concerns in Venezuela and Libya, as well as a smaller-than-expected build in U.S. stockpiles.
On Thursday the U.S. Energy Information Administration said that inventories increased by 400,000 barrels for the week ending Feb. 14.Â
China’s move to cut its benchmark lending rate on Thursday also helped to ease worries about slowing demand in the world’s second-biggest oil consumer and largest crude oil importer.
China reported 349 new confirmed coronavirus cases in Hubei province on Wednesday, the lowest in more than three weeks, while the death toll rose by 108, down from an increase of 132 the previous day.
“The market found support in still growing optimism over a soon-to-be-felt increase in Chinese economic activity and the prospect of Venezuelan export constraints,” JBC Energy said.
The United States imposed sanctions this week on a trading unit of Russian oil giant Rosneft for its ties with Venezuela’s state-run PDVSA in a move that could choke the OPEC member’s crude exports even further.
At the same time, the conflict in Libya that has led to a blockade of its ports and oilfields shows no signs of resolution.
The head of Libya’s internationally recognised government, Fayez al-Serraj, dashed hopes of reviving peace talks on Wednesday after the Libyan National Army of Khalifa Haftar shelled the port in the capital Tripoli, held by al-Serraj’s government.
The more than month-long shutdowns in Libya have reduced the OPEC member’s crude production by more than 1 million barrels per day (bpd).
Brent crude could extend gains to $60.22 a barrel, as suggested by its wave pattern and a projection analysis, said Reuters technical analyst Wang Tao.
American Petroleum Institute data on Wednesday showed a bigger than expected build in crude oil inventories, which helped to cap price gains.
U.S. crude stocks rose by 4.16 million barrels in the week to Feb. 14, compared with analyst expectations for a build of 2.5 million barrels, the industry group’s data showed.
“Although crude oil inventories rose by more than expected, the draws of 2.7 million bbls in gasoline stocks and 2.6 million bbls in distillate inventories keep the futures markets steady this morning,” brokerage PVM said.