Oil prices edged up on Thursday after two consecutive days of losses, with gains capped by returning supplies from Nigeria and Libya.
Brent crude futures were trading at $46.23 per barrel at 1012 GMT, up 38 cents, from the last settlement. U.S. West Texas Intermediate (WTI) futures were up 25 cents, or 0.6 percent, at $43.83 a barrel.
Crude prices fell about 3 percent for a second straight day on Wednesday following a 4.6 million barrel build in U.S. distillates inventories. It was the biggest weekly build since January and put distillate stocks at six-year seasonal highs.
However, U.S. crude inventories dropped by 559,000 barrels in the week to Sept. 9, defying analysts expectations of a crude build of 3.8 million barrels.
“It’s good news at this time of the year to see a draw like that (in crude stocks),” said Ric Spooner, chief market analyst for CMC Markets. (www.cmcmarkets.com/en-gb/news-and-analysis/market-analysts/ric-spooner). “But the market seems to be more concerned at the moment about the possibility of a sharp increase of the supply from Libya.”
Crude prices have fallen by around 8 percent in the last five trading sessions, including on expectations of a return of crude supplies from Libya and Nigeria, hit by months of unrest.
Libya’s National Oil Corporation is lifting force majeure at three ports and exports will resume immediately at two of them, it said on Thursday.
“Although any damage is reportedly still to be assessed, the reopening of these ports could have the potential to more than double Libyan crude production… However, given the track record over the last couple of years, we would not get too excited about a potential recovery in exports,” JBC Energy said in a note.
Expectations that Nigerian crude supplies could also be returning as offers for October-loading Qua Iboe crude have emerged even as force majeure on it remains in place.