FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. REUTERS/Angus Mordant
LONDON (Reuters) – Oil prices were broadly stable on Thursday after dipping in and out of positive territory as bulls took their cue from shrinking U.S. oil product stocks and bears looked at rising crude stocks and new coronavirus cases.
Brent crude LCOc1 futures were up 19 cents at $40.90 a barrel by 1350 GMT and U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 7 cents to $38.03.
Worries about fuel demand rose after a surge in coronavirus cases led Beijing to cancel flights and shut schools while several U.S. states, including Texas, Florida and California, reported sharp increases in new cases.
A rise in U.S. crude stockpiles to a record high for a second week in a row also weighed on sentiment, but U.S. government data showed lower inventories of gasoline and distillates, which includes diesel and heating oil, indicating higher demand.
“Gasoline and distillates both fell unexpectedly … Add to that that oil producers are still feeling the impact of the rout from March and April as (U.S.) crude oil output is now down at 10.5 (million barrels per day) and you might conclude that bulls have a case in point,” PVM oil analysts said in a note.
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, was holding an online meeting on Thursday to discuss the future of a record 9.7 million barrels per day (bpd) output cut.
Thursday’s discussion was unlikely to recommend an extension of record cuts into August, sources said. OPEC+ compliance with production cut commitments in May was 87%, two OPEC+ sources said on Wednesday.
Iraq and Kazakhstan are expected to present plans at the meeting for their production cuts and compensatory cuts for overproduction.
OPEC warned in a monthly report that the market would remain in surplus in the second half of 2020 even as demand improves, saying it now expects supply from outside the group to be about 300,000 bpd higher than previously thought.
Additional reporting by Sonali Paul in Melbourne and Roslan Khasawneh in Singapore; editing by David Evans and David Goodman