Oil held steady below $71 on Thursday, after sliding more than 2 percent to a two-month low a day earlier on a hefty increase in US fuel stockpiles, as the weak dollar offered some support. Traders are also watching the bearish impact of Saudi Arabia's move to restore full term crude supply to two Asian buyers, ahead of Opec's December 22 meeting, at which most members have said they would not raise production targets.
US crude for January delivery rose 8 cents to $70.75 a barrel by 0643 GMT, after losing almost $2 for its sixth straight day of losses on Wednesday, when it hit the lowest since early October at $70.13. London Brent crude gained 20 cents to $72.59. "A lot of investors are getting out of the high-liquidity markets like gold and crude," said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo. "It's tough for crude to go higher this month because everyone is moving to close their positions by the end of the month.
But early next year, money will be coming back to the exchanges and commodities will rise gradually. US Energy Information Administration (EIA) data showed that distillate stocks, which include heating oil and diesel, rose last week by an unexpected 1.6 million barrels, versus forecasts for a 600,000-barrel drop, reflecting persistently poor demand in the world's largest oil consumer during winter.
Gasoline inventories rose 2.2 million barrels, above projections of a 1.5 million-barrel build. The 3.8-million-barrel drawdown in crude stockpiles as refiners raised production was shrugged off as the government figures lagged the 5.8-million-barrel drop shown in separate industry data on Tuesday.
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