Oil has remained steady in overnight trade at around USD 77, after falling in the past two sessions on weak durable good data and the biggest weekly increase in US crude inventories for nearly two years.

US crude for September has advanced by 13 cents to USD 77.12 a barrel, after dropping by close to 0.7 pc yesterday.

ICE Brent has gained 5 cents to USD 76.11.

"We have tested USD 80 twice and failed. Now we are going to test lower into the range again," said Jonathan Barratt, managing director at Commodity Broking Services in Sydney, referring to the USD 70-80 range within which oil has traded for nearly two months.

US crude stocks surged 7.31 m barrels last week as imports jumped, government statistics showed yesterday, while gasoline and distillate stocks including diesel gained for the fifth and ninth consecutive weeks respectively.

"The crude market has shown the economy is not absorbing the supply, nor is the motivation there for refiners to process those supplies," said Barratt.

"The numbers in America are not that good."

The Organization of the Petroleum Exporting Countries (OPEC) has for the past year and a half expressed a preference for oil to remain stable around USD 75 a barrel, saying that price encourages investment to sustain and increase production capacity and does not threaten the economic recovery. "In a crisis situation you need stability," Barratt said. "Crude is very stable. This suggests to me that the forces of supply and demand are at ease with each other." (c) Reuters