Oil prices firm before key US inventories

Oil1Oil prices edged higher Wednesday as traders awaited the latest snapshot of crude inventories in top consumer the United States.

In London early afternoon trade, Brent North Sea crude for December won 15 cents to stand at $50.69 per barrel.

US benchmark West Texas Intermediate for delivery in December rose nine cents to $47.99 per barrel compared with Tuesday’s close.

The industry-funded American Petroleum Institute said US crude inventories rose by 2.8 million barrels in the week to October 30, according to Bloomberg News.

The industry report comes ahead of the release later Wednesday of the official US Department of Energy data on commercial crude stockpiles which is also expected to show an increase.

A build-up in the stockpiles indicates softer demand in the world’s top oil consumer and is negative for prices.

Traders also assessed news on Wednesday that shipments from a Libyan port were halted due to political tensions.

Libya’s Petroleum Facilities Guard halted crude shipments from Zueitina port indefinitely due to the widening conflict between the strife-torn nation’s rival governments, Bloomberg News said.

Tankers seeking to load crude at the port must register with the National Oil Corp. administration loyal to the internationally recognised government in the country’s eastern region, Bloomberg quoted Petroleum Guard spokesman Ali al-Hasy as saying.

“Supply is still the story,” Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney, told Bloomberg.

“Geopolitical issues will always put a base under prices and there is a solid range for oil.”

Oil prices have fallen by more than half from peaks of over $100 a barrel in June last year.

A global economic slowdown led by top energy guzzler China has led to demand not keeping pace with the crude supply glut which is expected to persist well into next year.

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