Oil pared gains after a report that showed US crude inventories had increased to a high of six months as imports and production rose.
The data from the US government on Wednesday showed that the inventories rose by 5.4 million barrels last week.
Gasoline stocks increased by 3.2 million barrels in the week ended Jan 9.
According to CNBC, February Brent crude dropped 27 cents at $46.32 per barrel. West Texas Intermediate crude for February pared gains trading at $46.16, up by 27 cents.
Prices of oil had recouped some losses but they remained under pressure after the World Bank cut its forecast for global economic growth.
Trader with Jeffries Bache, Christopher Bellew said, “This is just a little bounce after the very steep falls we’ve seen recently. We’ll be rangebound for a while before it goes down again.”
Adam Wise, managing director at John Hancock was quoted by Bloomberg Businessweek as having said. “Inventories are at incredible levels. It looks like some traders are looking for a bottom, but I don’t see a lot of support for the market until we see a measurable supply response.”
Oil dropped almost 50% last year, the highest since 2008, with the Organization of Petroleum Exporting Countries resisting calls to cut the output even as the US pumped at the fastest rate in more than three decades.
Some of the biggest oil traders outside the US have booked supertankers for storage of around 25 million barrels at sea.
Global head of commodity markets strategy at BNP Paribas, Harry Tchilinguirian said, “OPEC is not going to come to the rescue of the market. The onus is on floating storage.”
OPEC had not shown any sign of changing its strategy since it decided late last year to maintain the output despite the slowing economic growth in Europe and Asia.
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