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Oil prices edge higher but gains checked

Published 05/14/2015, 06:21 AM
Updated 05/14/2015, 06:21 AM
© Reuters.  Oil prices push higher but global growth concerns weigh on demand outlook

Investing.com - Oil prices edged higher Thursday but gains were held in check as concerns over the outlook for global economic growth overshadowed data showing that U.S. oil supplies fell for the second consecutive week last week.

On the New York Mercantile Exchange, crude oil for June delivery was up 0.24% to $61.61 a barrel from Wednesday’s close of $60.50. Oil ended that session down 0.41%.

On Wednesday data showing that U.S. retail sales were flat in April disappointed hopes for a rebound in second quarter growth after a sharp slowdown in the first three months of the year.

Other data showed that first quarter growth in Germany, the euro area’s largest economy, slowed in the first quarter, while several economic reports from China came in below forecasts, underlining concerns over slowing growth.

Oil prices came under pressure despite U.S. crude stockpiles falling for the second straight week. A report from the U.S. Energy Information Administration on Wednesday showed stockpiles declining 2.2 million barrels last week.

However the report also showed that U.S. oil production increased over the week and remained close to a multi-decade high at 9.4 million barrels a day.

U.S. oil prices have staged a recent rebound after dropping more than half from June to January, amid mounting expectations that U.S. shale oil production has peaked and may start falling in the coming months.

But global oil production is still outpacing demand following a boom in U.S. shale oil production and after OPEC's decision last year not to cut production.

In its monthly report on Wednesday, the International Energy Agency said global crude supply was up 3.2 million barrels a day year-on-year in April, far outstripping the increase in demand.

The IEA estimated global oil demand growth of 1.1 million barrels per day this year.

The IEA also said the first drop in U.S. crude oil stocks since January the week before last did not spell the end of inventory builds, pointing to signs that petroleum product stocks are rising.

Elsewhere, on the ICE Futures Exchange in London, Brent for July delivery was up 0.77%, to $67.79 a barrel.

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