Oil prices firm on mixed US stockpiles report

[LONDON] Oil edged higher on Friday after a mixed US report showed a healthy decline in crude and gasoline reserves but a rise in output that could aggravate the global supply glut In late morning London deals, Brent North Sea crude for July added 85 cents to US$63.16 per barrel, compared with Thursday's closing level.

US benchmark West Texas Intermediate (WTI) for delivery in July won 71 cents to US$58.39 a barrel.

The market had ticked higher Thursday after the mixed US petroleum report.

Daniel Ang, investment analyst at Phillip Futures in Singapore, said the US Department of Energy petroleum report "showed a mixed sentiment as the bearish production increase was offset by a bullish inventory decrease".

"As a result of this, we were seeing the bulls and the bears fighting fiercely." The report showed US commercial crude inventories fell 2.8 million barrels to 479.4 million in the week through May 22, while gasoline stockpiles fell 3.3 million barrels.

But the DoE also reported a rise in US crude production last week, by 304,000 barrels per day to 9.57 million.

Dealers have been hoping a slowdown in US output, and increased demand during the summer driving season, could whittle down the huge global supplies that were a key reason for the collapse in prices of more than 50 per cent between June 2014 and January this year.

Mr Ang said investors are awaiting the release of the second reading of US first-quarter gross domestic product later Friday for clues about demand in the world's biggest economy.

AFP