By Deep Kaushik Vakil and Ahmad Ghaddar
LONDON (Reuters) -Oil prices hovered near four-month lows on Wednesday on an expected supply boost later in the year when OPEC+ begins to unwind some output cuts, with markets also digesting U.S. jobs data and higher oil stocks.
Brent crude futures were up 26 cents, or 0.3%, at $77.78 a barrel by 0825 GMT. U.S. West Texas Intermediate crude futures rose 24 cents, or 0.3%, to $73.49.
Both contracts fell more than 1% on Tuesday to their lowest settlement levels since early February, having declined by about $3 a barrel on Monday.
The slide followed news from the Organization of the Petroleum Exporting Countries (OPEC) and its allies of plans to increase supply from the fourth quarter despite recent signs of weakening demand growth.
“The abundant supply picture at present undoubtedly is generating queasiness even from those not in the perennial OPEC-sceptic camp,” RBC Capital’s head of commodities research, Helima Croft, said in a market note.
However, Saudi Arabian energy minister Prince Abdulaziz bin Salman has said OPEC+ would pause the unwinding of the cuts or reverse them if demand wasn’t strong enough to absorb the barrels.
“The intention has always been to slow roll the barrels back in and not to send the market into a tailspin with a supply surge,” Croft said.
Prices drew some support from data showing that U.S. job openings fell more than expected in April, which could help the Federal Reserve’s fight against inflation and strengthen the case for cutting interest rates.
“Yesterday’s U.S. job data hints at a softer labour market and a September rate cut from the Fed,” said PVM Oil analyst Tamas Varga.
Meanwhile, U.S. crude stocks by increased more than 4 million barrels in the week ended May 31, according to sources citing American Petroleum Institute figures. [API/S]
Analysts polled by Reuters had forecast a 2.3 million barrel decline.
Gasoline stocks rose by more than 4 million barrels, twice the build expected by analysts.
“Renewed inventory draws are needed to push oil prices higher,” said UBS analyst Giovanni Staunovo, who remains bullish on expectations that oil supply growth would lag demand growth over the coming months.
The U.S. Energy Information Administration publishes official stockpile data at 1430 GMT on Wednesday.
Data for last week is being closely watched by markets because it reflects fuel usage around the Memorial Day holiday, the start of the so-called U.S. driving season.
(Reporting by Deep Kaushik Vakil and Ahmad GhaddarAdditional reporting by Florence Tan and Emily Chow in SingaporeEditing by David Goodman)
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