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Oil prices rose in Asia today after a dip in US crude stockpiles raised optimism about energy demand in the world’s top crude consumer during the winter season, analysts said.
US benchmark West Texas Intermediate for January delivery rose 33 cents to $67.71, while Brent crude for January gained 41 cents to $70.33 in late-morning trade.
The US Department of Energy said in its latest inventory report that crude stockpiles dropped 3.7 million barrels in the week ended November 28.
Analysts surveyed by the Wall Street Journal had predicted a rise of 600,000 barrels.
Daniel Ang, an investment analyst at Phillip Futures in Singapore, said the drop was supporting crude prices “slightly’’.
“Price consolidation seems to have ended,” he said, referring to volatility in the crude market this week following a sharp sell-off.
OPEC stance on output cut
Oil prices had plunged last Thursday after the OPEC cartel announced it was maintaining its output despite global oversupply. Prices hit five-year lows on Monday, with WTI as hitting $63.72 and Brent at $67.53, before rebounding.
Oil prices have fallen around 30 per cent since late June, weighed down by concerns of a glut of crude on world markets and weak demand.
The US inventories report also showed refineries in the country ramping up processing as the plant utilisation rate rose to 93.4 per cent of capacity from 91.5 per cent the prior week.
“This is likely due to anticipation for winter demand,” Ang said.
ECB policy outcome
Analysts said the crude market is next awaiting the outcome of a key European Central Bank meeting later today.
Europe’s single currency has suffered selling pressure ahead of the meeting, which is being watched to see if policymakers introduce monetary easing measures to kick-start the region’s sluggish economy.
Easing measures by central banks are closely watched by oil traders because of their impact on the US dollar. A stronger greenback makes dollar-priced crude more expensive for buyers using weaker currencies, hurting demand.
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