Oil prices crept up on Wednesday, extending the previous session’s rise, but gains were kept in check amid growing fears over the impact of a global economic slowdown on demand.
Brent was up by 17 cents, or 0.3 percent, at $68.14 by 0311 GMT, reversing earlier losses of a similar magnitude. On Tuesday, the global benchmark rose 76 cents to $67.97 a barrel, not far below its year-to-date high of $68.69, reached on March 21.
U.S. crude futures added 9 cents, or 0.2 percent, to $60.03, also reversing losses in earlier trade. The U.S. benchmark rose $1.12, or 1.9 percent, to $59.94 a barrel in the previous session.
“We seem to have reached a state of equilibrium after the recent headline-driven choppy trading and we need to see some new impetus for price direction,” said Jeff Halley, senior market analyst at OANDA in Singapore.
That is unlikely to come until there is a conclusion on the U.S.-China trade talks, he added, referring to negotiations that restart on Thursday as the world’s two largest economies seek to end an eight-month old trade war.
Oil rose on Tuesday as Venezuela’s main oil export port of Jose and its four crude upgraders were unable to resume operations following a massive power blackout on Monday, the second in a month.
Prices have risen more than 25 percent this year, supported by supply curbs by the Organization of the Petroleum Exporting Countries and other major producers, along with U.S. sanctions on exports from Venezuela and Iran.
But worries about demand have limited oil’s rally as manufacturing data from Asia, Europe and the United States pointed to an economic slowdown.
The American Petroleum Institute, a trade organization, said late on Tuesday that U.S. crude inventories rose 1.9 million barrels in the latest week, while analysts had forecast a decrease of 1.2 million barrels.
The market was waiting to see whether official figures due later on Wednesday would confirm the API data.
“It will be very interesting to see the inventory numbers tonight. If we see a fall we could see a sharp move higher,” OANDA’s Halley said.
Hedge funds and other money managers have increased bets that demand for oil will be sustained, even as the market rallied last week.