Refine Your Search
Welcome Guest     Home > News Board >
Crude Oil Trade News : Oil edges up, but may break $50 after U.S. inventories

Oil edges up, but may break $50 after U.S. inventories

Oil prices edged up on Thursday, nudged higher by a weaker dollar, while investors temporarily overlooked an unexpectedly large rise in U.S. inventory levels that could quickly push the market back below $50 a barrel, analysts said.

U.S. crude stocks rose by 3.1 million barrels to 461 million last week as refineries reduced production and idled capacity. Analysts had expected an increase of 2.2 million barrels.

The oil price is set for a 7 percent gain this week, its largest weekly increase since late August, after oil industry executives warned that this year's fall below $50 would force higher-cost producers to reduce output.

"Those expectations drove prices upwards, so that's being reassessed and it's possible we'll see prices dropping below $50 again," Commerzbank analyst Carsten Fritsch said.

Brent crude oil futures rose 56 cents to $51.89 a barrel by 0811 GMT, having touched a one-month high of $53.15 on Wednesday. U.S. crude futures rose 42 cents to $48.23 a barrel.

Underpinning the crude complex was a drop in the dollar ahead of the release of the minutes of the Federal Reserve's most recent policy meeting, which may offer some insight into the outlook for interest rates.

A weaker dollar tends to make it cheaper for non-U.S. investors to buy dollar-denominated assets.

"The release of the (Fed) minutes will be the main focus for today," Fritsch said.

With little data out this week, apart from industry and government inventory numbers in the United States, and China on holiday for the first three days, the market has focused on longer-term demand trends that have supported prices.

A U.S. Energy Information Administration report on Tuesday predicted global oil demand for 2016 would rise by the fastest rate in six years, suggesting the crude surplus that has pushed prices down about 50 percent since June last year is easing faster than expected.

"That is where we have seen a little bit of a pick-up over the last couple of sessions, but ever so slightly back to reality over the last 10 or 12 hours," said Ben le Brun, market analyst at OptionsXpress in Sydney.