Oil prices see increase in Asian trade
Oil prices rose in Asia Wednesday as dealers awaited the latest U.S. energy report and a Federal Reserve policy announcement later in the day in the hope it will shed light on plans to hike interest rates, analysts said.
U.S. benchmark West Texas Intermediate for July delivery gained six cents to US$60.03 while Brent crude for August added four cents to US$63.74 in afternoon trade.
Markets are hoping for some clues about the U.S. central bank’s timing for an interest rate rise following a broadly upbeat string of data on the world’s top economy in recent weeks.
Dealers are “at the edge of their seat, waiting for both the (Federal Reserve) meeting and U.S. crude inventories before making a move on prices,” said Daniel Ang, investment analyst at Phillip Futures in Singapore.
The U.S. Department of Energy (DOE) will release its petroleum report for the week to June 12 later Wednesday.
The American Petroleum Institute on Tuesday reportedly signaled a 2.9 million barrel drop in U.S. supplies last week, the seventh consecutive weekly drop.
A dip in U.S. stockpiles is seen as an indicator of healthy demand in the world’s top crude consumer, supporting global prices.
Markets have been hoping that a drawdown of the United States’ burgeoning reserves during the summer, coupled with a slowdown in its shale output, could whittle down excess global supplies.
A surplus of U.S. stocks was a key reason oil prices collapsed by more than 50 percent between June and January.
“We will be waiting to see how much production increases by. In the event it continues to increase, we should be worried about more supply issues moving forward,” Ang said, referring to the DOE report.