Oil prices extended gains in Asia today after a bullish US stockpiles report raised hopes of resurgent demand in the world’s top crude consumer, analysts said.
US benchmark West Texas Intermediate for August delivery rose 25 cents to $101.45, while Brent crude for September delivery gained two cents to $107.19 in mid-morning trade.
WTI surged $1.25 in New York on Wednesday after the US Energy Information Administration (EIA) said reserves fell 7.5 million barrels in the week to July 11. The drop outstripped analysts’ expectations of a 2.6 million barrel decline.
“The strong, better-than-expected US stockpiles data is giving significant help to oil prices at the moment,” David Lennox, resource analyst at Fat Prophets in Sydney, said.
EIA inventory report
The EIA’s inventory report also showed a rise in refinery utilisation in the United States, indicating plants are using more crude to increase gasoline production to keep up with the summer driving season.
Investors are also keeping a close watch on crisis-stricken crude producers in West Asia, analysts said.
Libya oil exports
Libyan exports are expected to return to global markets after the government had earlier this month announced that it had regained control of two ports previously blockaded by rebels demanding autonomy in the country’s east.
The ports at Ras Lanuf and Al-Sidra could add about 500,000 barrels of crude per day to global markets, analysts say.
Jihadist attacks in Iraq
In Iraq, a jihadist-led militant offensive has so far not reached the country’s southern region which is home to the bulk of its vast oil industry.
“Until we see those issues fully resolved and the threat of supply disruptions fully removed, traders are going to continue to have Libya and Iraq on their minds,” Lennox said.