Oil prices rally as supply keep growing

REUTERS/Nick Oxford

REUTERS/Nick Oxford

U.S. crude rose slightly while Brent dipped on Thursday, as traders tried to discern the oil market’s direction a day after prices rallied the most in two months even as supplies kept growing.

U.S. crude gained almost 2 percent early in the session, before disappointing U.S. economic data curbed investors’ enthusiasm after Wednesday’s 6 percent rally.

A falling dollar .DXY provided some support to oil as commodities priced in the greenback became more affordable for users of the euro and other currencies.

U.S. crude CLc1 settled up 12 cents, or 0.3 percent, at $46.06 a barrel, after trading between $45.16 and $46.79. It had rallied nearly $3 the previous session.

Brent LCOc1, the global oil benchmark, finished down 20 cents, or 0.5 percent, at $48.80, trading between $48.17 and $49.38.

U.S. economic growth braked sharply in the third quarter as businesses cut back on restocking warehouses to work off an inventory glut, data showed.

That, and sluggish new U.S. home sales data, cut into some of oil’s early gains, tempering the market’s enthusiasm over U.S. government crude inventory data on Wednesday that showed a smaller build than many had feared.

The government’s report of a 3.4 million-barrel crude build was below the 4.1 million-barrel hike cited by industry group the American Petroleum Institute a day earlier.

Stockpiles of gasoline and distillates, which include diesel, also fell more than expected.

Traders and analysts said oil prices could be rangebound in the coming week as growing crude stockpiles offset unseasonably strong demand for gasoline and other products.

“We are now firmly back in the $43-$49 trading band that has dominated since the start of September,” said David Thompson at Powerhouse, an energy-specialized commodities broker in Washington.

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