Oil steadies after big plunge on high inventories, lower demand forecasts

TOKYO, June 13 (Reuters) - Oil prices steadied on Thursday,
after slumping as much as 4% in the previous session to nearly
five-month lows on the back of a further buildup in U.S. crude
stockpiles and worries about lower demand growth.
Brent crude futures LCOc1 were up 12 cents, or 0.2%, at
60.09 by 0035 GMT. They fell 3.7% on Wednesday to settle at
$59.97 a barrel, the international benchmark's lowest close
since Jan. 28.
U.S. West Texas Intermediate crude futures CLc1 were also
12 cents, or 0.2%, higher at $51.26. They ended 4.0% lower in
the previous session at $51.14 a barrel, the lowest close since
Jan. 14.
The U.S. Energy Information Administration (EIA) on
Wednesday reported domestic crude stockpiles USOILC=ECI rose
unexpectedly for a second week in a row, climbing 2.2 million
barrels last week after analysts had forecast a decrease of
481,000 barrels.
At 485.5 million barrels, U.S. commercial stocks were at
their highest since July 2017 and about 8% above the five-year
average for this time of year, it said.
On Tuesday, the EIA cut its forecasts for 2019 world oil
demand growth.
The negative outlook is prompting hedge fund managers to
exit oil positions at the fastest rate since the fourth quarter
of 2018 due to increasing fears about the health of the global
economy.
Goldman Sachs said an uncertain macroeconomic outlook and
volatile oil production from Iran and others could lead OPEC to
roll over supply cuts.
With the next meeting of the Organization of the Petroleum
Exporting Countries (OPEC) set for the end of June, the market
is looking to whether the world's major oil producers will
prolong their supply cuts.
OPEC countries and non-member producers including Russia,
have limited their oil output by 1.2 million barrels per day
this year to prop up prices.
The energy minister of the United Arab Emirates, Suhail bin
Mohammed al-Mazroui, said on Tuesday that OPEC members were
close to reaching an agreement on continuing production cuts.
"Fundamental uncertainty on the current and forward states
of the global oil market is high," Goldman said.
"We believe that this will lead the group to roll forward
its current agreement, with likely no change to country level
quotas given the difficulty in determining required production
levels in coming months," the bank's analysts said.