Oil extends rise in Asian trade due to pos­i­tive fore­casts

The China Post - - BUSINESS INDEX & -

Oil prices climbed in Asia for a fifth-straight trad­ing day Wed­nes­day fol­low­ing fore­casts that U.S. shale pro­duc­tion would likely decline and help ease a global sup­ply glut, an­a­lysts said.

U.S. bench­mark West Texas In­ter­me­di­ate for May de­liv­ery gained 35 cents to US$53.64 and Brent crude for May rose 57 cents to US$59.00 in af­ter­noon trade.

The U.S. En­ergy In­for­ma­tion Ad­min­is­tra­tion said on Mon­day that out­put from the coun­try’s seven shale re­gions, which has driven pro­duc­tion to a record high, looked set to fall by 57,000 bar­rels per day in May.

An­a­lysts said a decline should help ease the global crude over­sup­ply, which led to a col­lapse in prices of more than 50 per­cent be­tween June and Jan­uary.

“Start­ing from this week, we have been see­ing fore­casts of lower oil pro­duc­tion sug­gest­ing that cur­rent oil pro­duc­tion should be drop­ping al­ready,” said Daniel Ang, in­vest­ment an­a­lyst with Philip Fu­tures in Sin­ga­pore.

But United Over­seas Bank said there could be a “price re­ver­sal” af­ter the re­lease later Wed­nes­day of the weekly U.S. crude stock­piles re­port.

An­a­lysts ex­pect it to show an­other in­crease, point­ing to weaker de­mand in the world’s big­gest oil con­sum­ing na­tion.

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