Oil prices see in­crease in Asian trade

The China Post - - BUSINESS INDEX & -

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.

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