Oil prices climb in Asia; concerns of crude supply glut
Oil prices climbed in Asia Thursday but lingering worries over the crude supply glut held down gains sparked by stronger U.S. demand and a falling U.S. dollar, analysts said.
U.S. benchmark West Texas Intermediate for September delivery turned higher in afternoon trade, rising 10 U.S. cents to US$43.40. Brent crude for September gained 15 U.S. cents to US$49.81.
Prices had moved off six-year lows on Wednesday on news that U.S. crude sup- plies fell — a sign of stronger demand in the world’s top oil consumer — and the U.S. dollar declined.
The U.S. Department of Energy Wednesday said the estimated amount of crude oil in the country’s commercial storage tanks tumbled 1.7 million barrels to 453.6 million barrels in the week ending Aug. 7.
The report also said U.S. domestic oil production fell 70,000 barrels a day to about 9.4 million barrels, which is positive for oil prices in an oversupplied market.
The U.S. dollar took a hit after mainland China’s surprise move to devalue the yuan, with analysts saying this could delay plans by the U.S. central bank to raise interest rates, a move previously expected as early as September.
A weaker U.S. currency makes dollarpriced oil cheaper for holders of other units, perking up demand and supporting prices.
But analysts said oil prices were being weighed down by continued concerns over a glut in the world crude market.