Singapore: Oil rose on Wednesday after an industry report showed crude and winter fuel stockpiles declined last week in top-consumer the United States, reducing a surplus that has weighed on market sentiment for months.
US crude for November rose 26 cents to $76.44 a barrel at 8:14am, while ICE Brent for the same month climbed 48 cents to $79.19.
As the Northern Hemisphere winter approaches, “there will be a pick-up in demand, but how much that tightens the market is the important thing for the oil price,” said Ben Westmore, a commodities analyst at National Australia Bank.
US inventories of distillates, a fuel category that includes heating oil and diesel, unexpectedly dropped by 2.8 million barrels in the week to 24 September, pulling stockpiles 3.5 million barrels below year-ago levels, the American Petroleum Institute (API) reported late on Tuesday.
Crude stocks fell by 2.4 million barrels, the API said, eight times as much as the 300,000-barrel decline forecast in a Reuters survey of analysts. Still, they remained 22 million barrels higher than in the same week a year ago.
“On the inventory side, with the API data we saw crude and distillate stockpiles falling, but the impact on the market will depend on the EIA numbers,” Westmore said. “It’s more that the bearish information will have less effect.”
Government statistics on inventories and demand from the Energy Information Administration (EIA) will follow on Wednesday at 1430 GMT.
Total US petroleum inventories, including crude and products, rose to 1.144 billion barrels in the week to Sept. 17, a record when measured on a weekly basis, a series of data that the EIA started compiling in 1990.
US crude imports are still recovering from the shutdown of two major Enbridge pipelines that ship Canadian crude to refiners in the Midwest. Line 6A was shut from 9-17 September. Line 6B, which was closed in July, resumed operations on 27 September.
US weekly retail gasoline demand fell versus the previous week and was lower against the year-ago period, MasterCard said on Tuesday.
Gasoline inventories rose 3 million barrels last week, according to the API, six times as much as expected.
Qatar Oil Minister Abdullah al-Attiyah said on Tuesday he does not expect Opec to make any changes in its production output quotas when the group meets in October.
Opec crude oil supply has fallen so far this month to the lowest level since November 2009 due to reduced output from Angola and smaller declines in the United Arab Emirates and Iran, a Reuters survey showed on Tuesday.
But oil prices on Tuesday slipped after US consumer confidence fell to its lowest level in seven months in September, underscoring lingering worries about the strength of the economic recovery.
In a sign of stabilisation in the housing market, US home prices hovered above multi-year lows without the help of the homebuyer tax credit that ended in April.
A top Federal Reserve official said on Tuesday that he has yet to make up his mind whether further easing in monetary policy is needed, despite a weakening U.S. economy and some risk of deflation.
Japan’s Nikkei average clawed 0.4% higher on Wednesday, with exporters such as Canon Inc gaining after Wall Street posted modest gains on Tuesday.
The euro surged to a five-month high against the dollar on Tuesday on expectations the Fed will print money to buy assets.
“The weaker US dollar is having an impact across commodities,” Westmore said. “But there is concern that further financial troubles related to eurozone debt may be tempering oil demand at the margin.”
A sliding dollar on Tuesday helped gold extend a record-setting streak that has seen the shiny metal gain nearly 20% this year and buoyed other commodities by discounting them for non-US investors.
Oil investors kept watching any possible weather threat to supplies as Tropical Depression 16 neared tropical storm strength in the Caribbean Sea. But it was expected to drift northeast and away from Gulf of Mexico energy infrastructure.