SINGAPORE/LONDON (Reuters) – Oil steadied above $70 a barrel on Thursday after a surprisingly steep decline in U.S. gasoline stocks revived supply worries during the height of the summer driving season.
London Brent crude, now a better gauge of global prices than U.S. oil, was up 3 cents at $70.56 a barrel by 0902 GMT, after rising 35 cents on Wednesday.
U.S. crude gained 13 cents to $69.10 a barrel, following an overnight spike of $1.20.
Gasoline inventories in the world’s top consumer fell by 700,000 barrels last week, against an expected rise of 1.2 million barrels, government data showed on Wednesday.
Distillate stocks, which include heating oil, fell by 2.3 million barrels, deepening a year-on-year deficit.
Price gains were tempered by rising stockpiles of crude oil — which hit a fresh nine-year high — and higher operating rates at U.S. refiners.
“The fall in gasoline stocks is due mainly to a lack of imports, not domestic production, which has been ramping up,” said Tobin Gorey, commodities strategist at the Commonwealth Bank of Australia.
“With the refineries coming back online, it seems unlikely that the inventories will keep falling.”
Longer-term supplies could be affected by the exits of U.S. majors Exxon Mobil Corp. and ConocoPhillips from Venezuela after the government decided to nationalize the companies’ multi-billion dollar oil projects.
Analysts said the move might lead to falling production in the OPEC member, which is the fourth-largest supplier to the United States, due to a loss of foreign capital and expertise.