Oil Dips As Market Weighs Supply Concerns, Fuel Stocks Build

Oil prices edged lower in volatile trading on Thursday as the market weighed concerns of global supply and a build in U.S. fuel product inventories.

Brent crude futures for September, the more actively traded contract, were down 45 cents, or 0.4%, to $112.00 per barrel at 0711 GMT.

The August contract, which expires Thursday, was at $115.15, down $1.11 a barrel, or 1.0%.

U.S. West Texas Intermediate (WTI) crude futures fell 57 cents, or 0.5%, to $109.21.

"The net drop in crude oil inventories was flattered by SPR releases, while the gasoline stock jump is because U.S. refineries are running at over 95.0% capacity," said Jeffrey Halley, OANDA's senior market analyst for Asia Pacific.

Crude inventories fell by 2.8 million barrels in the week to June 24, far exceeding analysts' expectations in a Reuters poll for a 569,000 barrel drop, U.S. Energy Information Administration data showed, though U.S. gasoline and distillate stockpiles climbed.

Fuel stocks rose as refiners ramped up activity, operating at 95% of capacity, the highest for this time of year in four years.

But further disruptions to supply limited price declines, said ANZ analysts, amid a suspension of Libyan shipments from two key eastern ports, while Ecuador saw output fall due to ongoing protests.

Exports of Ecuador's flagship Oriente crude remain suspended under a force majeure declaration as the spread of anti-government protests hurt oil output, state-run Petroecuador said on Wednesday.

Meanwhile, the OPEC+ group, which includes allies such as Russia, began two days of meetings on Wednesday, though sources said there was little prospect of pumping more oil.