Oil prices dipped on Thursday after a surprise increase in U.S. inventories reversed an advance in prices that had pushed global crude benchmarks to their highest levels since July last year.
U.S. light crude settled down 29 cents at $53.77, while North Sea Brent crude was down 8 cents at $56.14 a barrel by 2:34 p.m. ET (1934 GMT)
Traded volumes were thin with many investors away for year-end holidays, although the expiry of the front-month February ICE Brent contract on Thursday could generate some activity.
U.S. distillate and gasoline futures expire on Friday, which could add to price swings, analysts noted.
“The petroleum markets are mixed in light-volume trade amid a general wait for fresh fundamental news that might push prices out of their established ranges,” Tim Evans, an energy futures specialist at Citi Futures, said in a note.
Both crude oil benchmarks have made big gains this month since OPEC and other producers agreed to curb production in an attempt to balance an oversupplied fuel market.
“The market is in good shape although it might fail to make significant advances this year,” said analyst Tamas Varga at London brokerage PVM Oil Associates. “If that is the case the uptrend should continue in early January.”
“Either way, the odds are still on higher numbers.”
Crude stocks rose by 614,000 barrels in the week to Dec. 23, as refineries cut output crude imports fell, the Energy Information Administration reported.
Analysts polled by Reuters before the report had forecast on average that inventories would decline by 2.1 million barrels.
In Cushing, Oklahoma, the delivery point for U.S. crude’s benchmark West Texas Intermediate contract, inventories rose by 172,000 barrels, the EIA said.
Gasoline stocks fell by 1.6 million barrels, compared with analysts’ expectations in a Reuters poll for a 1.3 million-barrel gain.
Distillate stockpiles, which include diesel and heating oil, fell by 1.9 million barrels, versus expectations for a 1.8 million-barrel increase, the EIA data showed.
A committee of the Organization of the Petroleum Exporting Countries and non-OPEC producers will meet in Vienna on Jan. 21-22 to discuss compliance with the production agreement, Kuwaiti oil minister Essam Al-Marzouq told state news agency KUNA.
“Brent will be … positively impacted by the OPEC and non-OPEC cuts should the agreed reductions be largely adhered to over the next six months,” said Philips Futures’ investment analyst Jonathan Chan.