As economic worries competed with a tighter supply outlook for later in the year, oil prices remained steady on Wednesday despite a surprise rise in U.S. crude inventories, Reuters reports.

In the futures market, Brent crude rose 2 cents, or 0.7 per cent, to $74.42 a barrel. The West Texas Intermediate U.S. crude oil price fell 5 cents to $70.81 at 0921 GMT.

The International Energy Agency on Tuesday predicted demand would outpace supply by 2 million barrels per day (bpd) in the second half of the year, with China making up 60 per cent of oil demand growth in 2023.

“Crude prices remain heavy as energy traders just can’t shake off global demand concerns. It doesn’t matter how upbeat everyone is for China’s second half of the year, the current situation is too disappointing,” said Edward Moya, an analyst at OANDA

U.S. crude stockpiles rose by about 3.6 million barrels in the week ended May 12, according to market sources citing American Petroleum Institute figures. Seven analysts polled by Reuters had expected a 900,000 barrel drawdown.

U.S. government data on crude and product stockpiles is due at 1430 GMT.

Oil steady as demand worries face tight supply outlook

Oil prices were steady on Wednesday after a surprise rise in U.S. crude inventories stoked demand concerns as economic worries competed with a tighter supply outlook for later in the year.

Brent crude futures rose 2 cents, or 0.7 per cent, to $74.42 a barrel. West Texas Intermediate U.S. crude was down 5 cents to $70.81 at 0921 GMT.

The crude inventory build added to concerns about U.S. growth after data showed retail sales rose 0.4 per cent in April, short of estimates for an increase of 0.8 per cent.

Talks on raising the U.S. debt ceiling continue to weigh on the market. The U.S. Treasury Department has estimated that the United States will go into a crippling default as early as June 1 if Congress does not lift the ceiling.

In China, April industrial output and retail sales growth undershot forecasts, suggesting the economy lost momentum at the beginning of the second quarter.

“Markets were in a wait-and-watch mode over the outcome of crucial negotiations to raise the U.S. government’s debt ceiling,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

Macroeconomic data for April released on Tuesday confirmed the narrative of a patchy and slow recovery in the country and continues to weigh on oil market sentiment