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Oil prices extend gains in Asia
[SINGAPORE] Oil prices extended gains in Asia Wednesday on a weaker dollar and amid expectations the latest US crude-oil inventories report will show a decline, easing a global supply glut, analysts said.
US benchmark West Texas Intermediate (WTI) for June delivery gained 46 cents to US$61.21 while Brent crude for June rose 20 cents to US$67.06 in mid-morning trade.
WTI surged US$1.50 in New York while Brent closed up US$1.95 in London, gaining support from a weaker US dollar.
The greenback bought 119.78 yen in Asia on Wednesday, down from 119.90 in New York on Tuesday and 120.11 on Monday.
A weaker greenback makes dollar-priced oil cheaper for buyers using weaker currencies, boosting demand and pushing global prices higher.
Daniel Ang, investment analyst at Phillip Futures in Singapore, said prices are also supported by expectations of a "further drop in US stockpiles this week".
The US Department of Energy (DoE) will release its crude stockpiles report for the week to May 8 later Wednesday.
Last week the DoE unexpectedly reported the first decline in commercial crude-oil stockpiles in 16 weeks, but still stockpiles, at 487.0 million barrels, remained at their highest level on record for that time of year.
Analysts are expecting another decline in Wednesday's report, with the consensus estimate of a fall of 250,000 barrels in the week ending May 8, according to a Bloomberg News survey.
Mr Ang said dealers will also be monitoring total US production figures released in the DoE report. Last week's report showed production slipped marginally, by 4,000 barrels to 9.4 million barrels a day.
Dealers have been hoping that a slowdown in US shale output could help ease the build up of global crude reserves, which was a key reason for the collapse in prices of more than 50 per cent between June and January.
"We again hope for production levels to drop to below 9.3 million barrels per day in order to see real change to the oversupply issue," Mr Ang said.