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Oil reverses losses after API data

“The Deer Park news was certainly supportive to the market,” said David Thompson, executive vice-president at Washington-based commodities broker Powerhouse. “The evolving ‘stay’ view for Britain in the EU and mounting troubles for Venezuela were other positives for oil.”

Brent crude futures’ front-month, August, settled down 3 cents at $50.62 a barrel, after falling more than $1 to a session low of $49.46. The contract had gained 7 percent in the last two sessions.

U.S. crude’s expiring July front-month contract closed down 52 cents, or 1 percent, at $48.85 a barrel, versus a session low at $48.16. The more actively-traded August futures, the new front month from Wednesday, settled down 11 cents at $49.85.

Oil investors worried about the possibility of global crude supplies tightening from the economic crisis in Venezuela. Output from Venezuela, which sits atop the world’s biggest oil reserves, was 2.37 million barrels per day (bpd) in May, down 5 percent from April and 11 percent from last year’s average, according to OPEC data.

Crude futures also got brief support from news that rebels sabotaging Nigeria’s crude exports had denied agreeing to a one-month ceasefire.

The Niger Delta Avengers’ denial came after government officials told Reuters a truce had been struck with the group last week after talks involving Nigeria’s oil minister, community groups and state governors in the Niger Delta, which produces most of the country’s crude.

Investors will watch for weekly U.S. crude inventory data due from trade group American Petroleum Institute at 4:30 p.m. EDT (2030 GMT).

An updated Reuters poll forecast that U.S. crude stockpiles fell 1.7 million barrels last week, declining a fifth week in a row. The U.S. government will issue official inventory data on Wednesday.

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