Oil prices were mixed in volatile trade on Wednesday, with global benchmark Brent up on worries about Russian airstrikes in Syria but US crude down after data showed a surge in domestic inventories.
Oil prices rose more than 2 percent on Tuesday as higher stock prices on Wall Street and expectations of lower USA crude inventories lifted the market from the previous day’s slide.
Front-month US crude had dropped 49 cents, more than 1 percent, to 44.74 a barrel by 0012 GMT (2012 EDT).
WTI (West Texas Intermediate) crude oil futures contracts for November delivery are trading close to the key resistance level of $46 per barrel.
Late on Tuesday, the American Petroleum Institute said the US crude oil stockpiles in one week that ended on September 25, increased by 4.6 million barrels to 457.8 million barrels.
Brent for November settlement fell 9 cents to $48.14 a barrel on the London-based ICE Futures Europe exchange.
Nymex reformulated gasoline blendstock – the benchmark gasoline contract – rose 0.1 per cent to $US1.33 a gallon.
As demand falters, the oil market is being rattled by the prospects of Iran exporting more crude if it is found to have complied with the terms of a deal signed in July to curb the country’s nuclear programme.
Oil halted its advance near $45 a barrel as lower Chinese industrial profits signaled demand may be weakening in the world’s second-biggest consumer. The volume of all futures traded was 33% below the 100-day average.
“We seem to stabilise over expectations we’ll see production levels here in America continue to drop, and this provides an outlet for fears of an excess supply hanging on the market”, said Gene McGillian of Tradition Energy.
“U.S. output [is] showing firm signs of slowing”, Rhidoy Rashid, oil analyst at consultancy Energy Aspects told Reuters Global Oil Forum.
Crude had rebounded from a six-year low in August as low prices forced USA drillers to idle rigs, causing production to slip in six of the past seven weeks.
Traders are meanwhile concerned about China’s economic slowdown because of its impact on demand for raw materials, including oil. The widening price spread, combined with growing availability of Asia-Pacific supplies, has started to attract increasing interest in moving shipments to the United States market. Brent is down 3.30 per cent so far in September, while WTI is down around 9 per cent.