Oil prices rebound on less than expected build in stocks
SINGAPORE Oil futures rebounded in Asian trade on Wednesday, buoyed by a forecast for a less than expected build in crude oil stockpiles last week.
A weakening dollar also lent some support but concern that a two-month rally was fading in an oversupplied market put a ceiling on gains.
Brent futures LCOc1 climbed 40 cents to $39.54 a barrel as of 0104 GMT (09:04 a.m. EDT) after settling down $1.13 in the previous session.
U.S. crude CLc1 rose 45 cents to $38.73 a barrel after ending the previous session down $1.11.
Oil prices fell about 3 percent in the previous session after Kuwait and Saudi Arabia said they would resume production at the jointly operated 300,000-barrel-per-day Khafji field even as oil output is supposed to be capped.
“There’s a little bit of steadying in oil prices in the Asian time zone. The predominant attitude is one of wait-and-see until the Energy Information Administration (inventory) figures come out,” said Ric Spooner, chief market analyst at Sydney’s CMC Markets.
The EIA is due to release official crude inventory data later on Wednesday.
U.S. crude stocks rose last week by 2.6 million barrels to 534.4 million barrels data from industry group, the American Petroleum Institute, showed on Tuesday.
That was less than analysts’ expectations of a 3.3 million barrel build, but still a record high for a seventh straight week.
“The market is seeing how currencies go as well. It was slightly disconcerting for the market (on Tuesday) to see oil prices falling at the same time as the dollar was falling,” Spooner said.
The dollar index .DXY nudged lower on Wednesday after slipping to an eight-day low in the previous session. A weaker dollar makes greenback-denominated commodities cheaper for holders of other currencies.
Rosneft, Russia’s top oil producer, is set to lower oil output, Russian Natural Resources Minister Sergei Donskoi said on Tuesday, although he gave no time frame.
The plan could be lending support to oil prices, Spooner said, although the impact would be muted because the market is already pricing in possible output curbs.
OPEC member Iran is expected to attend an oil producers meeting in Doha on April 17 to discuss a cap on global oil production, although it may not take part in the discussions, a source familiar with Iranian thinking said on Tuesday.
(Reporting by Keith Wallis; Editing by Richard Pullin)