Brent Settles Above $104; Demand Jitters Outweigh Data
Oil floated close to $104 a barrel on Wednesday as persistent concerns about global demand, with U.S. crude stocks rising to new highs, outweighed a rise in crude imports by China and a surprise jump in German industrial output.
Data from the U.S. Energy Information Administration (EIA) showed crude stocks rose last week to a new record high at 395.5 million barrels
"We are lacking the catalyst in the numbers to suggest we could go back to the highs reached earlier this year," Olivier Jakob, analyst at Petromatrix, said.
China's daily crude imports in April rose 3.7 percent from a year ago and 3.5 percent from March, customs data showed, as refiners in the world's No.2 consumer took advantage of lower prices to replenish stocks.
German industrial output unexpectedly rose 1.2 percent on the month in March, contrasting with recent gloomier data.
The Chinese and German figures boosted world shares and other commodities, despite doubts about the quality of the numbers from China.
The increase in U.S. crude stocks came below forecasts in a Reuters survey of analysts but still underscored the ample supply levels.
"Even with the news from China and Germany, the background is still pretty weak on the oil side as the market is well supplied and we are still in a seasonal demand low," said Simon Wardell, an analyst at Global Insight.
Prices may stay under pressure, given projections of a well-supplied market and bleak global demand.
The EIA cut its forecast for demand growth for this year to 890,000 barrels per day (Bpd) and pared its 2014 estimate to 1.21 million bpd, or just over 2.1 million bpd demand growth over two years.
At the same time, the EIA sees supplies from countries outside the Organisation of the Petroleum Exporting Countries growing by 1.11 million bpd in 2013 and by a further 1.77 million next year.
Further strengthening the global supply outlook, Sudan said on Tuesday it had received the first crude shipments from South Sudan since 2012.
In the near term, data from the American Petroleum Institute (API) showed U.S. crude inventories rose 680,000 barrels for the week to May 3, falling short of a Reuters poll forecast of an average increase of 1.9 million barrels.
Concerns that Syria's civil war could deteriorate were eased after Russia and the United States announced plans to convene international talks to end the strife.