Thursday

Oil Higher in Asian Trade

Filed under Buzz

Oil was higher in Asian trade on Thursday, bouncing back from overnight falls as investors digested key US inventory data, analysts said.  New York’s main contract, light sweet crude for January delivery rose 20 cents to 76.80 dollars a barrel. Brent North Sea crude for January delivery added 42 cents to 78.30 dollars. Oil prices fell sharply in US trade Wednesday after news of a larger-than-expected rise in gasoline or petrol supplies in the United States, the world’s biggest energy consuming nation. The US government’s Department of Energy (DoE) announced Wednesday that gasoline reserves jumped by four million barrels. That was far more than the 700,000-barrel increase forecast by analysts.

The DoE added that American crude oil stockpiles leapt by 2.1 million barrels, which was more than twice market expectations. However, investors in Asia focused Thursday on a bigger-than-expected 1.2-million-barrel drawdown in US distillate stocks, including diesel and heating oil, indicating steady demand ahead of the winter, an analyst said.

The market was expecting a 300,000-barrel decline. “One optimistic thing was the distillate stocks which were down,” said Benjamin Westmore, a Melbourne-based minerals and energy economist with the National Australia Bank.

Westmore said investor sentiment was also lifted by the US Federal Reserve’s Beige Book survey which pointed to signs of economic recovery. “It wasn’t overwhelmingly positive but it gave further indications the recovery is gaining some traction,” he said. The Federal Reserve had said Wednesday in its Beige Book survey that US economic conditions are progressing “modestly” amid signs of improvement in the troubled labour market.