Oil prices edge up after two days of steep falls
SINGAPORE – Crude oil prices recovered on Thursday after a two-day slide, although high U.S. stocks and strong global production, along with a firm dollar, were keeping markets under pressure.
The gains followed two days of steep falls as a resurgent dollar weighed on the market amid concerns that U.S. crude supplies may have started rising again after three weeks of draws.
Industry group American Petroleum Institute (API) said after the market’s settlement that U.S. crude inventories rose by 1.3 million barrels last week, following three weeks of straight withdrawals.
The U.S. dollar index ticked lower, but remained near one-month highs.
Front-month Brent futures climbed half a dollar to $62.56 a barrel by 0202 GMT on Thursday. U.S. crude futures were up 31 cents from their last settlement at $57.82 per barrel.
Brent’s premium over U.S. prices has come off over 45 percent since mid-April, with record OPEC production weighing on Brent.
The American benchmark, meanwhile, received some support from the peak demand summer driving season, almost a month of steady stock draws that only came to an end this week, and raging Canadian wildfires that forced the evacuation of several oil and gas sands production sites.
Technical market indicators implied that the spread could narrow further as U.S. oil could rebound into a range of $58.14-$58.41 per barrel while Brent was expected to drop to $61.50 per barrel, according to Reuters’ technical analyst Wang Tao. – Reuters