HONG KONG (APP) – Oil prices were lower in Asia Thursday following a mixed US energy report and after the US Federal Reserve signalled it will keep its near-zero benchmark interest rates unchanged for now, analysts said.
US benchmark West Texas Intermediate for July delivery fell 39 cents to $59.53 while Brent crude for August was down 26 cents at $63.61 in mid-morning trade.
The US Department of Energy’s (DoE) inventory report for the week to June 12 showed Wednesday that crude reserves fell 2.7 million barrels, the seventh straight weekly decline.
However, crude supplies at the closely watched trading hub in Cushing, Oklahoma, rose by 100,000 barrels.
The data also showed US oil production at 9.59 million barrels per day, down a scant 21,000 from last week’s record high.
Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at business consultancy firm EY, said investors are switching focus “between price-supporting news from the US where inventories and rig counts are falling” and concerns about the global supply glut.
Dealers have been hoping that a drawdown of the United States’ burgeoning reserves during the summer months, coupled with a slowdown in its shale output, could whittle down excess global supplies.
A surplus of US stocks was one of the reasons oil prices collapsed by more than 50 percent between June and January.
Crude investors are also digesting the Fed’s indication on Wednesday after a two-day policy meeting that it will maintain near-zero interest rates for now and adopt a cautious and methodical approach to raising them from later in the year.
Interest rate adjustments are closely watched by crude investors as an increase usually leads to a pick-up in the dollar. A stronger greenback makes dollar-priced oil more expensive for buyers using weaker currencies, denting demand.
