Crude oil prices rose in Asia today as dealers predicted that the latest US crude stockpiles and production data will point towards upbeat demand in the world’s top crude consumer, analysts said.
US benchmark West Texas Intermediate crude for September delivery gained 31 cents to $46.05, while Brent crude for September delivery was up 31 cents at $50.30 in late-morning trade.
Prices had skidded for three consecutive sessions before rising modestly yesterday ahead of the US Energy Information Administration’s release of the latest US stockpiles figures later today.
“We should be seeing drops to US crude production. This should help support the market in the longer run,” said Daniel Ang, investment analyst at Phillip Futures in Singapore.
Crude inventories
Last week’s data showed crude inventories slid to 459.7 million barrels in the week to July 24, the lowest level since March. Production stood at 9.41 million barrels a day during the same period, the slowest pace in more than two months.
A dip in US crude inventories typically indicates strong demand in the country, the world’s top crude consumer and second largest energy consumer after China.
Dealers have been hoping an uptick in US demand, coupled with a slowdown in output, could whittle down the huge global supplies that were a key reason for the collapse in prices from around $120 in June last year.
Traders are also looking ahead to Friday’s US jobs report for July, which could lift the dollar if traders conclude the Federal Reserve is likely to raise interest rates more quickly. A strong greenback discourages crude purchases outside the US because oil is priced in dollars.