You are here

Oil prices up in Asian trade

[SINGAPORE] Oil prices edged higher in Asia on Thursday after data showed US stockpiles dipping, while the Federal Reserve indicated interest rates would not be hiked until the middle of next year.

US benchmark West Texas Intermediate for January delivery rose eight cents to US$56.55 while Brent crude for February gained 18 US cents to US$61.36 in mid-morning trade.

The gains add to an advance Wednesday that came after the Department of Energy said reserves in the world's top crude consumer fell by 800,000 barrels in the week ending December 12.

The figures are a rare piece of good news for prices, which have fallen about 50 per cent from their 2014 highs in June owing to a global supply glut, a strong dollar and Opec's refusal to cut production.

Adding to the upbeat outlook was the Fed policy board's statement that it could be "patient in beginning to normalise the stance of monetary policy", adding that the decision will depend on economic data.

The announcement raised the likelihood that rates would be hiked by the mid-2015, pouring water on speculation of an earlier increase owing to the resurgent US economy.

Fed chief Janet Yellen, speaking at a news conference after a two-day meeting, said the US economy is "strengthening" but that decisions to raise rates remained data-dependent.

"Overall this looks to be a victory for the doves," said Howie Lee, investment analyst at Singapore-based Phillip Futures.

Interest rate adjustments are closely watched by crude investors an increase usually leads to a pick-up in the dollar.

A stronger greenback makes dollar-priced oil more expensive for buyers using weaker currencies, denting demand.

AFP