(Reuters) OIL prices slipped on Thursday in thin trade ahead of a public holiday, as traders weighed a larger-than-expected build in U.S. oil stocks against tightening global supply.
Brent futures were down 86 cents, or 0.8 per cent, at $107.92 a barrel, while U.S. West Texas Intermediate futures were off $1.10 or 1.1 per cent, at $103.15 a barrel at 13:35 GMT.
Both contracts, on Wednesday, had shrugged off a build in U.S. crude inventories to end the trading session over four per cent higher.
“The market was less active than usual, due to the long weekend in Europe, America and most of Asia, with the reduction in the number of active buyers also contributing to the easing in prices,” said Ricardo Evangelista, senior analyst at ActivTrades, citing the U.S. stock build.
He went on to say: “However, the outlook for the price of the barrel remains very much tilted to the upside – demand remains amidst tight supply.”
The International Energy Agency, on Wednesday, warned that from May onwards, roughly three million barrels per day of Russian oil could be shut-in due to sanctions or buyers voluntarily shunning Russian cargoes.
At the same time, major global trading houses are also planning to curtail crude and fuel purchases from Russia’s state-controlled oil companies in May, Reuters reported on Wednesday.
The probability of an EU ban on Russian oil being agreed may be almost zero, but no one will be able or wanting to say that clearly, Vandana Hari, founder of oil market analysis provider Vanda Insights said.
“And, even a continuing sabre-rattling will be enough to keep the risk premium alive.”
Despite signals that global supply disruption will persist, oil stocks in the U.S. rose by more than 9 million barrels last week, the U.S. Energy Information Administration said on Wednesday, driven in part by releases from the nation’s strategic reserves. Analysts in a Reuters poll had anticipated just an 863,000-barrel build.
U.S. gasoline stocks fell 3.6 million barrels last week, far above anticipated levels, and distillate inventories also declined.