Oil steadied below $54 a barrel as signs of weakening economic growth from Europe to the U.S. and a reported increase in American crude stockpiles were offset by supply curbs from OPEC and its allies.
Futures in New York fell as much as 1.5 percent before paring losses. Growth concerns were fueled by a drop in German factory orders, while a gauge of demand for U.S. service industries sank to a one-year low. The American Petroleum Institute was said to report that the nation’s inventories of crude, gasoline and diesel rose last week.
Oil has traded in a tight range above $50 after its best start to a year in almost two decades amid production cuts by the Organization of Petroleum Exporting Countries and its allies including Russia. Yet lingering concerns over record U.S. output -- as well as rising inventories -- and the country’s trade war with China have limited gains.
“The API set a bearish tone after reporting builds across the board,” PVM Oil Associates analysts including Stephen Brennock wrote in a report. “All in all, these figures will do little to silence the U.S. glut alarm bells,” Brennock said in a separate note.
West Texas Intermediate crude for March delivery fell as much as 80 cents to $52.86 a barrel on the New York Mercantile Exchange, and traded at $53.48 as of 8:41 a.m. local time. The contract slid 90 cents on Tuesday.
Brent for April settlement declined 21 cents to $61.77 a barrel on the London-based ICE Futures Europe exchange, after losing 53 cents on Tuesday. The global benchmark crude was at a $7.96 premium to WTI for the same month.
The API was said to report that U.S. crude stockpiles rose 2.51 million barrels last week, while gasoline increased by 1.73 million barrels and distillates by 141,000 barrels. A Bloomberg survey of analysts also showed higher U.S. oil inventories, estimating a 1.85 million-barrel rise. If Energy Information Administration data due later Wednesday confirms that, it will be the third consecutive weekly gain.
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