Oil prices were steady overnight, weighed by concerns about a global economic slowdown that could dent crude demand but supported by expectations that OPEC and its allies will extend their supply curbs.
Brent crude futures settled unchanged at $US62.29 a barrel while US West Texas Intermediate (WTI) crude futures edged one US cent to end at $US53.27 a barrel.
Prices fell after US crude stockpiles unexpectedly rose by 4.9 million barrels in the week to June 7 to 482.8 million, industry group the American Petroleum Institute said on Tuesday.
Both Brent and WTI are down roughly 20 per cent from their 2019 peak reached in April.
Concern about slowing demand and economic growth has had a large impact on sentiment amid a trade war between the United States and China.
The US Energy Information Administration cut its 2019 world oil demand growth forecast by 160,000 barrels per day to 1.22 million bpd.
“The demand outlook is central to the oil market these days,” said John Kilduff, an analyst at Again Capital LLC.
“The global economic data has been chock full of negative surprises, of late, attributable to the fallout from the US-China trade war.”
Chinese authorities said they will allow local governments to use proceeds from special bonds as capital for major investment projects, in a bid to support the slowing economy amid an escalating trade conflict with the United States.
Supporting oil prices on Tuesday was optimism that the Organisation of the Petroleum Exporting Countries and other producers such as Russia would extend an output cut deal that has been in place since the beginning of the year to prop up prices.
The group, known as OPEC+, is due to meet in late June or early July to decide whether to extend the pact.
Russian energy minister Alexander Novak said on Monday there is still a risk that oil producers pump out too much crude and prices fall sharply, suggesting the government might support an extension.
The comments, along with remarks from Saudi Arabia, bolstered expectations the deal will be renewed.
Russia’s average oil output stood at 11.04 million bpd on June 1-10, up from an average of 10.87 million bpd on June 1-3, two sources familiar with official data said on Tuesday.
Oil output in the first three days of June was the lowest since mid-2016, according to Reuters calculations.