Global crude benchmark Brent slipped below the psychologically key point to a 12-year low in the previous session after data showed stockpiles rose in top consumer the US.
The looming return of Iranian oil to world markets after the final implementation of a deal on its nuclear programme — which Tehran expects by Sunday — also weighed on prices.
US benchmark West Texas Intermediate for delivery in February was up 33 cents at US$30.81 at around 0810 GMT. Brent crude for February was trading 10 cents higher at US$30.41 after lingering below US$30 in the morning.
“Oil prices continued trending downwards this week amid persistent concerns on global oversupply,” Sanjeev Gupta, who heads the Asia Pacific oil and gas practice at EY, told AFP.
Oil prices have collapsed by about two thirds in 18 months as supplies outweighed demand growth due to a slowdown in the world economy, and particularly in key consumer China.
Adding to that picture, a US Energy Information Administration (EIA) report released yesterday showed domestic oil stockpiles rose 200,000 barrels in the week ending January 8.
A 8.2 million barrel surge in gasoline inventories and a 6.1 million barrel rise in distillate stocks also pointed to sluggish consumption in the world’s top oil consuming nation.
The EIA also cut its global oil demand forecast slightly to 95.19 million barrels a day this year, while raising its forecast for global production.
Oil prices “won’t see much recovery this year amid a supply glut,” added Bernard Aw, market strategist at IG Markets in Singapore.
“As a result, oil prices should continue to remain low, where a sustained pick up is expected only in the third quarter of 2017,” Aw said in a market commentary.
The market will be closely watching China’s economic growth data to be released early next week, according to Gupta.
China, the world’s second-biggest economy and the top energy consumer, is experiencing a slump in its economic growth and has recently been hit by turmoil in its stock market. — AFP