Singapore: Oil prices rose in Asia Thursday, bouncing back from a sharp fall the day before but expectations of another build in US crude inventories cast a shadow on the market. Traders are waiting for the release later Thursday of data by the US Energy Information Administration (EIA) showing the country's commercial stockpiles for an indication of demand in the world's top crude consumer.
Release of the data comes a day later than usual because of the US Veterans Day holiday. Prices tumbled Wednesday after a report by the American Petroleum Institute showed US commercial crude inventories had jumped by more than six million barrels. A rise in the inventories typically signals weaker demand and is a negative influence on oil prices.
The EIA report "will provide vital clues for the near term price development", said Sanjeev Gupta, head of the Asia Pacific oil and gas practice at professional services firm EY. At around 0320 GMT, US benchmark West Texas Intermediate for delivery in December was trading 27 cents higher at $43.20 and Brent crude for December was up 26 cents at $46.07 a barrel.
However, WTI sank $1.28 Wednesday and Brent fell $1.63. Gupta said the market is setting its sights on a policy meeting next month by the Organization of the Petroleum Exporting Countries (OPEC).
OPEC's decision to maintain high output levels despite a global crude supply glut has led prices to plunge by more than 50 percent from peaks of more than $100 a barrel in mid-2014. Gupta said that during a summit of Arab and South American leaders on Tuesday, "OPEC member Ecuador said the only way to balance the market was to cut the supply, and hoped to reach an agreement among producers on that at the coming OPEC meeting".
Analysts have projected that the crude oversupply will last well into next year.
