LONDON (Feb 2): Oil prices steadied on Thursday after a sharp rise in US crude and gasoline stockpiles, although evidence that OPEC and other big exporters were cutting production helped support sentiment.
Brent crude was up 5 US cents at US$56.85 a barrel by 0925 GMT after settling up US$1.22 in the previous session. US light crude was down 5 US cents at US$53.83 after climbing US$1.07 on Wednesday.
Both crude oil benchmarks are now near the top of recent price ranges. Brent has spent most of the last two months trading between US$53.00 and US$58.00 a barrel, at a premium of around US$2.50 to the US crude futures contract.
"We are still firmly within the ranges," said Tamas Varga, analyst at London brokerage PVM Oil Associates. "I think buyers will shy away if the market jumps another dollar."
US crude oil inventories rose last week by an unexpected 6.5 million barrels to 494.76 million barrels, the Energy Information Administration said on Wednesday. The build in crude stocks far exceeded analysts' expectations for an increase of 3.3 million barrels.
Gasoline stocks climbed by 3.9 million barrels, compared with analyst expectations of a 1 million barrel gain.
Inventories in the United States, the world's biggest oil consumer, have been near record highs for much of the last year and domestic production is rising as US oil companies drill for shale.
But prices have been underpinned by indications that producers from the Organization of the Petroleum Exporting Countries and other exporters are cutting output.
The curbs follow an agreement last year by OPEC and other exporters to reduce supplies by a combined 1.8 million barrels per day (bpd) to prop up prices that remain at about half their mid-2014 levels.
A Reuters survey this week found most key oil producers were sticking to the deal with compliance above 80%.
Russian oil output contracted in January by 100,000 bpd, Energy Ministry data showed on Thursday.
Tension between the United States and Tehran is also rising after Iran tested a ballistic missile, raising the possibility of future sanctions that could curb Iranian oil supply.