Oil on Friday declined for the second week as signs that supplies remain plentiful offset optimism over the signing of a US-China trade agreement.
Futures in New York were little changed, but ended the week 0.9 percent lower.
Refiners have turned a crude surplus into a product surplus with US gasoline and distillate stocks expanding by more than 40 million barrels over the past three weeks.
The build overshadowed Beijing’s commitment to spending US$52.4 billion in additional purchases of US energy in the next two years as part the “phase one” trade deal between the world’s biggest economies.
“There is a positive vibe after the trade deal, but the fact is we are so oversupplied it’s going to be difficult to get the market up past US$60,” Mizuho Securities USA LLC futures director Bob Yawger said in New York.
Before the landmark US-China accord was signed, prices reached a six-week low on Wednesday after US government data showed that petroleum inventories in the country expanded to the highest levels since September last year.
Supplies at the critical commercial storage hub in Cushing, Oklahoma, rose for the first time in 10 weeks.
US crude production continues to set new records, hitting 13 million barrels per day earlier this month.
Oil drilling rose for the first time in four weeks, led by the Permian Basin, indicating that oil supplies are poised for more gains in the near term.
West Texas Intermediate futures for delivery next month settled up US$0.02 at US$58.54 per barrel on the New York Mercantile Exchange.
Brent for March settlement rose US$0.23 cents to US$64.85 on the ICE Futures Europe exchange in London after climbing 1 percent on Thursday. That put its premium over West Texas Intermediate for the same month at US$6.27 per barrel.
The market might have to contend with another week of inventory builds as fog on the US Gulf Coast has intermittently suspended marine traffic and slowed exports, Lipow Oil Associates LLC president Andy Lipow said in Houston, Texas.
The International Energy Agency on Thursday said that global markets have a “solid base” of inventories and climbing supplies from outside the OPEC cartel, even as elevated tensions in the Middle East endanger production from Iraq and elsewhere.
In other energy trading, wholesale gasoline fell US$0.01 to US$1.64 per gallon and heating oil declined US$0.01 to US$1.86 per gallon, while natural gas fell US$0.07 to US$2 per 1,000 cubic feet.
Additional reporting by AP
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