SINGAPORE (APP) – Oil prices extended a rebound in Asia Thursday following data showing a decline in US inventories, analysts said.
US benchmark West Texas Intermediate (WTI) for September delivery was up 13 cents at $48.92 and Brent crude gained 32 cents to $53.70 a barrel in late-morning trade.
Both contracts rebounded from recent losses to close higher on Wednesday after the Energy Information Administration said stockpiles fell 4.2 million barrels in the week to July 24, more than expectations for a decline of 200,000.
“WTI and Brent reversed losses overnight on Wednesday amid bullish supply data released by the EIA,” said Sanjeev Gupta, who heads the Asia oil and gas practice at professional services organisation EY.
The EIA also said US oil production fell during the week, giving some relief to the global crude oversupply that has depressed prices.
Dealers are also keeping tabs on the Federal Reserve’s plans for raising interest rates after it held fire Wednesday at its latest policy meeting but indicated the US economy is improving.
The dollar edged up after the meeting as expectations grow that the central bank will announce a liftoff as early as September.
“The market will closely monitor the Fed’s move as the rate hike will impact commodity prices heavily. Most analysts expect the first interest rate hike to happen in September or December this year,” Gupta said.
As oil is traded in dollars a strong US unit makes it more expensive for holders of weaker currencies, hurting demand and dampening prices.