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Brent crude fell towards $61 on Thursday, reversing previous gains as a bulging US crude stockpiles offset glimpses of an oil demand recovery.
Both Brent and US crude recorded their largest percentage gains in nearly two weeks at Wednesday’s settlement, closing more than 30 per cent higher than the trough of $46.59 a barrel on January 13.
Prices were boosted by improved views on global oil demand from the Saudi oil minister and better than expected Chinese data.
“The previous gains reflected the fact that the market is looking forward to more production cuts coming with declines in rig counts,’’ said Ric Spooner, chief analyst at CMC Markets in Sydney.
“But it is a conflict play between production and demand. Certainly, production is exceeding demand, at least in the US.’’
US crude stocks rose 8.4 million barrels last week to 434.1 million barrels, a seasonal record high for the seventh straight week, as refineries trimmed output, according to the Energy Information Administration (EIA).
Product supplies on the other hand tightened to their lowest level since 2000, forcing US to import around 1 million tonnes of diesel and heating oil from Europe.
Brent crude had declined 17 cents to $61.46 a barrel by 0212 GMT. US crude was down 31 cents at $50.68.
The Brent/WTI price difference widened to as much $11.01 a barrel during Thursday’s early trade, near a near 13-month wide of $11.03 but narrowed back to $10.79 a barrel by 0211 GMT.
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