Oil steady on lower U.S. crude stocks, cautious demand outlook

Oil prices were little changed on Thursday as a lower-than-expected drop in U.S. crude inventories and a potentially weaker demand outlook kept investors cautious.

September Brent futures climbed 6 cents, or 0.1%, at $79.52 a barrel by 0645 GMT, while August U.S. West Texas Intermediate (WTI) crude gained 5 cents, or 0.1%, to $75.40 a barrel.

The August WTI contract expires on Thursday. September WTI crude was higher by 6 cents, or 0.1%, to $75.35.

“Following some heavy selling pressure overnight, there is an attempt for oil prices to stabilise this morning,” said Yeap Jun Rong, market strategist at IG.

Prices fell in the previous session as investors took profits after data showed U.S. inventories fell less than analysts expected.

Meanwhile, the U.S. dollar was largely unchanged at 0645 GMT, edging down 0.1%.

The outlook for demand in China, the world’s biggest crude buyer, was also unclear amid its slowing economy.

Crude prices may struggle to find a clear direction amid a mixed global demand outlook in the next few weeks, Citi analysts said in a note.

Demand is “a mixed picture with stronger gasoline and jet fuel demand, but weaker petchems and diesel,” the analysts said.

Brent crude prices have broken to a higher range through July, after getting stuck at $72-$78 through May and June, the Citi analysts added, with support from Saudi output cuts and geopolitical risks.