Oil edges up in Asian trade

File photo: Hasan Jamali.

File photo: Hasan Jamali.

Published Jul 21, 2016

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Tokyo - Oil prices edged up in Asia on Thursday following US data showing a drop in crude inventories, a sign of a tightening supply market.

Crude stockpiles fell by 2.3 million barrels last week - the ninth week in a row - data from the US Department of Energy showed.

This helped offset a surprise rise in gasoline inventories over the summer - traditionally the peak demand season for motor fuel.

At about 03h30 GMT, US benchmark West Texas Intermediate was up 10 cents, or 0.22 percent, to $45.85, while North Sea Brent crude was up 16 cents, or 0.34 percent, to $47.33.

“Without major improvements in supply and demand fundamentals, oil prices are expected to remain in a holding pattern,” EY oil and gas head Sanjeev Gupta wrote in a note.

“In the short term, the markets will focus on the interest rate decision by the European Central Bank and trading statistics from Japan.”

The ECB is expected to make an announcement later Thursday on whether it will raise interest rates.

Markets have gone on the upturn on expectation of fresh stimulus, led chiefly by news that Japanese Prime Minister Shinzo Abe is eyeing a plan worth at least 20 trillion yen, the Kyodo News agency said.

The greenback has also picked up over the past two weeks on growing speculation the Federal Reserve will lift interest rates before the end of the year following a string of upbeat data, including a forecast-busting reading on jobs creation.

Crude prices have fluctuated between $44 and $52 per barrel in the past month, after falling below $30 in February on the back of the world supply glut and weak demand.

Supply disruptions that lifted prices from near 13-year lows in February have eased and the situation in Turkey is stabilising after the weekend's failed coup attempt, turning attention back to the supply issue.

AFP

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