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Oil prices gain on upbeat US stockpiles report
[SINGAPORE] Oil prices rose in Asia on Thursday after a decline in US petroleum stockpiles and production boosted hopes of an easing in the global supply glut, analysts said.
US benchmark West Texas Intermediate (WTI) for July deliver rose 10 cents to US$59.08 while Brent crude for July gained 16 cents to US$65.19 in late-morning trade.
WTI jumped 99 cents and Brent climbed US$1.01 on Wednesday after the latest official US crude stockpiles report, rebounding from sharp falls a day earlier on worries about excess supply and a rise in the dollar.
"Crude oil bounced back a bit after US stockpiles fell more than expected, causing some to think that oversupply may be easing for the moment," said Nicholas Teo, market analyst at CMC Markets in Singapore.
The US Department of Energy said supplies of commercial crude, excluding strategic petroleum reserves, fell 2.7 million barrels in the week ending May 15, more than the 1.75 million-barrel decline projected by Bloomberg News.
Daily production dropped 112,000 barrels a day to 9.26 million barrels a day, after a 5,000-barrel increase in the previous week.
Dealers have been hoping that a slowdown in US 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.
Mr Teo said "with no new leads expected to come from the supply nor demand picture, a further push for crude may come from the volatility of the US dollar".
A strong greenback makes dollar-priced oil more expensive, denting demand.
The US dollar stood at 121.16 yen in late-morning Asian trade, down from 121.32 yen in New York on Wednesday, but well above 120.68 yen earlier in Asia on Tuesday.
Analysts said investors are also monitoring UN efforts to re-launch political talks in Yemen as fears grow that civil strife in the country could escalate and draw in oil-producing neighbours Saudi Arabia and Iran, which are backing the warring factions.
"The markets will be monitoring closely for any geopolitical unrest involving the major production region," said Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at business consultancy firm EY.