Crude oil futures edged up on Thursday, supported by news of an attack on a Nigerian oil pipeline and a weaker U.S. dollar, after four days of falls over scepticism that a global glut in crude supplies could be stemmed.
Brent crude was trading up 33 cents, or 0.7 percent, at $47.19 a barrel by 1020 GMT. U.S. crude was up 28 cents, or 0.6 percent, at $45.62 per barrel.
Futures hit five-week lows on Wednesday after data showed stocks of oil in the United States had risen by a record amount last week, adding negative sentiment to doubts whether OPEC has the stomach to cap record crude production.
On Thursday, prices were underpinned by concerns about supply disruptions after militants in Nigeria’s southern Niger Delta oil hub attacked a pipeline operated by the Nigerian National Petroleum Corporation on Wednesday.
“Following a host of negative news, which culminated with another erratic U.S. inventory report, oil has stabilised and moved higher, driven by short-covering and the sense that it may have become too pessimistic about an OPEC deal being reached,” said Ole Hansen, head of commodity strategy at Saxo Bank.
A softer dollar also buoyed prices by making dollar-denominated oil less costly for importing countries.
The dollar slipped for a third session as positioning for next week’s U.S. presidential election overshadowed the Federal Reserve’s latest review, in which policymakers signalled they were on track to hike rates next month.
The Organisation of the Petroleum Exporting Countries (OPEC) meets on Nov. 30 to agree a production cut after two years of global oversupply and low prices that have hurt states’ budgets. But many market watchers are sceptical that a concrete deal can be reached or enforced.
U.S. crude stockpiles soared by more than 14 million barrels last week, the largest weekly build up since the U.S. Energy Information Administration started keeping records in 1982, according to data issued on Wednesday.
“The recovery (in oil prices) has more to do with the fact that it hit a strong support at around $46.50 a barrel,” a Singapore-based oil broker said, referring to Brent that hit a low of $46.46 in the prior session. U.S. crude fell to $44.96 on Wednesday.