Oil Wavers on Mixed Demand Signals -- Update

By Stephanie Yang and Neanda Salvaterra Features Dow Jones Newswires

Oil prices wavered between gains and losses on Monday amid mixed signals for crude demand.

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Light, sweet crude for September delivery rose 18 cents, or 0.4%, to $49 a barrel on the New York Mercantile Exchange, after trading as low as $48.37 a barrel earlier in the session. Brent, the global benchmark, gained 12 cents, or 0.2%, to $52.22 a barrel.

Prices have been treading water in recent weeks as investors assess supply and demand figures to determine how close the oil market is to global rebalancing. U.S. crude inventories have steadily declined over the past two months, helping to support prices. However, uncertainty over U.S. shale activity and the global oil cartel's output have capped gains at just under $50 a barrel.

"It's just a choppy market," said Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates.

Healthy European demand for crude has helped support prices, analysts said. But a surprise build in gasoline stockpiles one week ago sparked concerns over consumer demand in the U.S., especially as seasonal demand starts to wane.

Last week, the International Energy Agency published revised figures for global crude demand. At the end of 2017, demand is now seen at 33 million barrels a day, compared with a previous estimate of 33.6 million barrels.

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The new estimate is "only marginally above the current level of OPEC output," according to Commerzbank analysts.

"In other words, there will no longer be any significant supply deficit in the second half of the year, so there is hardly likely to be any further inventory reduction," they said in a note.

Since 2016, the Organization of the Petroleum Exporting Countries and a handful of nations outside the cartel have cut global oil supply by about 2% in an attempt to rebalance the market.

"More positive overtures from the Saudi Arabian and Iraqi Energy Ministers on their respective commitments to the agreed cuts helped bolster market sentiment on the outlook for prices," J.P. Morgan analysts wrote in a Friday note.

Sandy Fielden, director of oil and products research at Morningstar, said lower volatility seen in crude markets may suggest that oil is closer now to a consensus price, and supply and demand are coming into balance.

"Although outside factors such as geopolitical instability...can always throw a curveball, the indications are that today's relative stability is here to stay until the next system shock," Mr. Fielden said in a Monday report.

Gasoline futures were recently near flat at $1.6126 a gallon, and diesel futures were up 0.6% at $1.6455 a gallon.

Write to Stephanie Yang at stephanie.yang@wsj.com and Neanda Salvaterra at neanda.salvaterra@wsj.com

(END) Dow Jones Newswires

August 14, 2017 11:25 ET (15:25 GMT)