Oil prices edged higher in Asian trade today buoyed by solid gains in US stocks and stronger demand in the world’s biggest economy, analysts said.
Concerns about a disruption in West Asian supply caused by the turmoil in Egypt have eased after a timetable for fresh polls was announced yesterday following last week’s military coup.
New York’s main contract, light sweet crude for delivery in August, gained 99 cents to $104.52 a barrel in the morning trade and Brent North Sea crude for August delivery added two cents to $107.83.
“Traders have shifted their focus from the Egypt violence to the positive sentiment in the US equity markets,” Kelly Teoh, market strategist at IG Markets in Singapore, said in a note.
US stocks had yesterday closed solidly higher for the fourth straight day on optimism about corporate earnings. Most Asian stock markets were also up today, cheered by the rally on Wall Street.
The market gains came despite the latest economic forecast from the IMF, which trimmed the world economic growth expectations for 2013 to 3.1 per cent from the April forecast of 3.3 per cent.
Oil prices were also supported by data from industry group American Petroleum Institute (API) showing crude inventories in the United States dropped by nine million barrels last week, indicating a pick-up in energy demand in the world’s biggest economy.
Lee Chen Hoay, investment analyst at Phillip Futures in Singapore, said the API data surpassed market expectations for a drawdown of 3.3 million barrels.
The US Energy Information Administration will release the official crude inventory data for the week to July 5 later today.