Oil prices rose on Wednesday after an unexpected U.S. stockpile drawdown and higher gasoline prices, but concerns remained about a global surplus, falling Asian demand and whether the U.S. Federal Reserve would raise interest rates.
Front-month U.S. West Texas Intermediate (WTI) crude futures traded up 55 cents at $45.14 per barrel at 0755 GMT.
Brent was up 45 cents at $48.20 a barrel.
The prospect of falling U.S. oil production as prices skim six-year lows has narrowed the gap between benchmark U.S. and Brent crude futures.
The Brent-WTI spread between the two prompt months shrank on Tuesday to around $1.45 a barrel, the narrowest since January, when WTI briefly cost more than Brent.
The spread was around $2.60 on Wednesday.
"We believe that this could be the market's reaction to the decline in U.S. crude production (drilling) ...further exacerbated as Iranian crude could be entering the market, which puts heavy pressure on the global benchmark," said Daniel Ang, analyst at Singapore-based Phillip Futures.
Iranian crude that has been stored in tankers could be released quickly to world markets once Western sanctions against Tehran are lifted.
U.S. crude futures rose after the American Petroleum Institute (API) reported a 3.1-million-barrel crude stockpile drawdown last week, versus analyst expectations for an increase.
A rise in U.S. gasoline prices also supported prices.
Official U.S. crude inventory data is scheduled to be released on Wednesday.
Outside the United States, international crude markets made smaller gains as concerns about oversupply and slowing Asian demand weighed on prices.
These concerns have seen oil prices fall by almost 60 percent since June 2014.
Australian bank Macquarie said China's economic outlook for the fourth quarter of the year was not convincing.
"There are green shoots showing scattered evidence of improvement ...However, as of yet these signs are not broad-based so it's hard to conclude whether they are the beginning of a genuine recovery or just normal economic fluctuations," the bank said.
Markets are keeping a close eye on Washington as the U.S. Fed begins a two-day session to decide whether to raise interest rates for the first time in a decade.
Higher U.S. interest rates would likely attract cash from money traders, lifting the dollar. That could be bearish for oil markets as it would raise prices for holders of other currencies.
source: Reuters
No comments:
Post a Comment