Oil continues climb on mixed US data

By: 8 years ago

AP FILE PHOTO

SINGAPORE, Singapore—Oil prices extended their rebound in Asia on Thursday following a mixed set of US stockpile data but analysts warn that the gains might not hold.

The Department of Energy’s weekly report released Wednesday showed that commercial crude oil supplies were up 0.3 percent last week, but gasoline inventories and domestic crude production were both down.

The figures are closely watched by investors, who use them as an indicator of global supply, while gasoline stocks are a focus for the market amid the summer driving season when demands peak as Americans hit the road for their vacations.

The data reverses losses from the previous week’s figures which showed an increase in gasoline stock, sending prices tumbling into a bear market as both futures fell more than 20 percent from June peaks of near $50 a barrel.

US crude had dropped below the $40 dollar mark for the first time since April on Monday.

At about 0300 GMT, US benchmark West Texas Intermediate was up 27 cents to $41.10 a barrel while North Sea Brent was gained 21 cents to $43.31.

Analysts, however, caution against any long-term gains.

“Signs of rising production from major producers bring bearish signals to the long term market,” said EY Services head of oil and gas Sanjeev Gupta.

“In the coming days, the market will look for clues from the US trade and payroll data as well as China’s July trade balance.”

The Labor Department is due to announce official job-creation data for July on Friday.

After falling to a 12-year low of sub-$30 a barrel at the start of the year, prices regained ground on supply disruptions such as the Canada’s wildfires in its oil producing regions and rebels bombing supply lines in Nigeria.

But this was quickly reversed in the last month as weak demand and a sluggish global economy continue to put downward pressure on prices and concerns remain about a stubborn supply glut.