Oil prices up in Asian trade

[SINGAPORE] Oil prices rose in Asia on Wednesday as dealers awaited the latest US energy report and a Federal Reserve policy announcement later in the day that dealers hope will shed light on its plans for hiking interest rates, analysts said.

US benchmark West Texas Intermediate for July delivery gained 10 cents to US$60.07 while Brent crude for August added five cents to US$63.75 in late-morning trade.

Markets are hoping for some clues about the US central bank's timing for an interest rate rise following a broadly upbeat string of data on the world's top economy in recent weeks.

Dealers are "at the edge of their seat, waiting for both the (Federal Reserve) meeting and US crude inventories before making a move on prices," said Daniel Ang, investment analyst at Phillip Futures in Singapore.

The US Department of Energy (DoE) will release its petroleum report for the week to June 12 later Wednesday.

The American Petroleum Institute on Tuesday reportedly signalled a 2.9 million barrel drop in US supplies last week, the seventh consecutive weekly drop.

A dip in US stockpiles is seen as an indicator of healthy demand in the world's top crude consumer, supporting global prices.

Markets have been hoping that a drawdown of the United States' burgeoning reserves during the summer, coupled with a slowdown in its shale output, could whittle down excess global supplies.

A surplus of US stocks was a key reason oil prices collapsed by more than 50 percent between June and January.

"We will be waiting to see how much production increases by. In the event it continues to increase, we should be worried about more supply issues moving forward," Ang said, referring to the DoE report.

AFP