Oil prices up in Asian trade
Singapore: Oil prices rose in Asia today after a mixed US energy report showed a healthy decline in crude stockpiles but a rise in output that could aggravate the global supply glut.
US benchmark West Texas Intermediate for September delivery rose two cents to USD 45.17 while Brent crude for September gained 11 cents to USD 49.70 in late-morning trade.
The US Department of Energy said yesterday crude stockpiles in the world’s top consumer slid 4.4 million barrels in the week through July 31, indicating robust demand.
But it also showed US production rising by 52,000 barrels per day to 9.5 million barrels per day, rebounding from the previous week’s dip.
“Crude prices continued to remain weak with focus on oversupply,” said Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at business consultancy firm EY.
Dealers had 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 from around USD 120 in June last year.
Gupta said tomorrow’s US jobs report for July “will considerably impact crude prices”.
Traders are looking to see if the expected bullish report will lift the dollar and subsequently persuade the Federal Reserve to raise interest rates more quickly.
A strong greenback discourages crude purchases outside the US because oil is priced in dollars.