TOKYO, Dec 12 (Reuters) - Oil prices steadied on Thursday
with the market mood switching to relief as OPEC forecast a
supply deficit next year, from doom and gloom over data showing
a surprise increase in U.S. crude inventories.
Brent futures LCOc1 rose 19 cents, or 0.3% to 63.61 a
barrel by 0100 GMT, after skidding 1% on Wednesday on the U.S.
stocks build-up.
West Texas Intermediate crude CLc1 was down 9 cents at
$58.85 a barrel, following a 0.8% drop the previous session.
The Organization of the Petroleum Exporting Countries (OPEC)
on Wednesday said it now expected a small deficit in the oil
market in the next year, suggesting the market is tighter than
previously thought - even before the latest pact with other
producers to curb supply takes effect. The revised forecast by OPEC marks a further retreat from a
prediction of a glut in 2020 as U.S. production growth begins to
slow.
Still, U.S. inventories are on the rise. Crude stockpiles
last week rose unexpectedly, gaining more than 800,000 barrels,
compared with a Reuters poll that forecast a 2.8 million barrel
decline. EIA/S
Inventories of petroleum products also increased with
gasoline stocks surging by more than 5 million barrels and
distillates gaining a bit over 4 million barrels - with both
more than double expectations.
"The overall report was very bearish as demand fell off a
cliff and total stockpiles climbed to the highest level in seven
months," said Edward Moya, senior market analyst at OANDA.
Beyond the balance between inventories and supply, investors
are also awaiting news on negotiations between Washington and
Beijing to end a long-running trade war and get an agreement
before another round of U.S. sanctions kicks in.
The lingering battle between the world's two biggest
economies has hit global growth, in the process denting demand
for crude and oil products.
U.S. President Donald Trump is expected to discuss tariffs
on Chinese goods set to be imposed on Dec. 15 with top trade
advisers as markets brace for fallout in China's reaction.