Oil prices hold as markets weigh smaller US stockpile drawdown, Libya risks Via Investing.com

Investing.com– Oil prices steadied in early Asian trade on Thursday, after a smaller-than-expected draw in U.S. inventories fueled concerns about cooling demand, although the prospect of extended supply disruptions in Libya sustained losses limited.

Crude oil markets suffered two straight days of losses, mostly reversing a recent rally amid lingering concerns that slowing growth in the U.S. and China will hurt demand in the coming months.

The shutdown in Libyan production has traders attaching a certain risk premium to crude oil, as have signs of sustained conflict in the Middle East.

which expires in October fell slightly to $78.62 a barrel, while settling at $74.57 a barrel by 20:54 ET (00:54 GMT).

U.S. inventories fall less than expected as summer demand cools

The U.S. drew a lower-than-expected 0.85 million barrels in the week to Aug. 23, data from the Energy Information Administration showed on Wednesday.

stocks saw a bigger draw than expected but unexpectedly rose.

The mixed stock readings raised concerns that U.S. oil demand will cool as the busy summer travel season draws to a close. Fears that a slowdown in the US economy will weigh on demand also remained in play following a string of weak labor market readings in recent weeks.

The focus now turns to US second-quarter data due later on Thursday for more clues about the world’s largest economy.

data – the Federal Reserve’s preferred gauge of inflation – will also be due on Friday amid growing optimism about interest rate cuts.

Supply risks to Libya persist, preventing crude losses

But higher oil losses were held back by some elements of the risk premium after Libya halted production at most of its major oil fields this week amid a growing conflict over the country’s central bank.

The Central Bank of Libya is the only internationally recognized depository for payments for Libya’s oil exports and is controlled by the internationally recognized government in the western part of the country.

But the eastern part, which owns most of the country’s oil fields and is controlled by separate leadership, recently called for a change in central bank leadership and halted all oil production.

Libya produced about 1.2 million barrels per day in July, with any prolonged production shutdown heralding a global oil shortage.