Singapore: Crude prices were higher in Asia on Thursday, 27 September, as traders cast a wary eye on the formation of a new tropical storm in the Gulf of Mexico, dealers said.
The weak dollar was also lending support to oil prices as foreign investors find it cheaper to invest in the dollar-denominated commodity, they said.
At 11:28am (0328 GMT), New York’s main contract, light sweet crude for November delivery, rose 38 cents to $80.68 a barrel from $80.30 in late US trades Wednesday.
Brent North Sea crude for November delivery was 44 cents higher at $77.87a barrel.
Prices had initially declined in US trading hours Wednesday after a surprise rise of 1.8 million barrels in US crude reserves but the formation of a new tropical storm kept the market nervous, dealers said.
“Oil markets were also monitoring weather developments, including a storm in the Atlantic and a depression in the Gulf of Mexico,” analysts from the Commonwealth Bank of Australia said.
Traders fear the new storm, Karen, could affect key oil production in the region which would strain supplies ahead of the coming winter season.
The US Department of Energy said Wednesday that crude inventories had jumped by 1.8 million barrels in the United States — the world’s biggest consumer of energy — during the week ended 21 September.
Heating oil stocks rose by 700,000 barrels but are still below levels seen over the past few years.
Meanwhile, the weak US currency was also bolstering crude prices, dealers said.
“The broad weakness in the greenback continues to support oil prices, with most dollar-denominated commodities benefiting from a weaker dollar, as they become relatively cheaper for foreign investors,” said Sucden analyst Andrey Kryuchenkov.
The US dollar fell to a new all-time low of 1.4162 against the euro Wednesday on growing concerns over the United States economy.
In early Asian trading Thursday, the dollar was at 1.4130 to the euro compared with 1.4125 in late US trades Wednesday.