(Reuters) Following significant increases in fuel stocks in the United States, the world's largest oil consumer, oil prices fell for a second day on Thursday. However, the slide was restrained by worries about a tighter supply and anticipation of rising winter fuel demand.


By 0409 GMT, Brent crude futures dropped 8 cents to $76.08 per barrel. At $73.21, U.S. West Texas Intermediate crude futures fell 11 cents. Compared to the previous session, both prices were down about 0.1%.

Due to a stronger currency and a larger-than-expected increase in U.S. fuel inventories, both benchmarks saw price declines of more than 1% on Wednesday.

The U.S. Energy Information Administration said on Wednesday that gasoline stockpiles increased by 6.3 million barrels to 237.7 million barrels last week. Reuters asked analysts who anticipated a 1.5

 

Instead of increasing by 600,000 barrels as anticipated, distillate stockpiles increased by 6.1 million barrels during the week to 128.9 million barrels.

However, compared to experts' projections of an 184,000-barrel decline, oil inventories dropped 959,000 barrels during the week.

"Some selling was prompted by increased U.S. fuel inventories, but the downside is limited due to the northern hemisphere's winter demand season," stated Hiroyuki Kikukawa, president of NS Trading, a division of Nissan (OTC:NSANY) Securities.

According to JPMorgan analysts, "increased use of heating fuels in the Northern Hemisphere" will be the main driver of January's oil consumption, which is predicted to climb by 1.4 million barrels per day year over year to 101.4 million barrels per day.

"Global oil demand is expected to remain strong throughout January, fueled by colder-than-normal winter conditions that are boosting heating fuel consumption, as well as an earlier onset of travel activities in China for the Lunar New Year holidays," according to analysts.

The Brent futures market structure suggests that traders are growing increasingly anxious about supply tightening at the same time that demand is rising, despite the declining prices.

On Wednesday, the difference between the first-month Brent contract and the six-month contract was the largest since August. When futures for on-time delivery are more expensive than those for later delivery, this backwardation widens, which usually means that demand is rising or supply is decreasing.

Future prospects, China's consumption patterns, and the energy policies of the new U.S. administration