Singapore: Oil prices were steady above $79 a barrel on Thursday, as the market awaits US government oil inventory data and watches the dollar, which is flirting with 15-month lows against a basket of currencies.
The US Energy Information Administration data, delayed by one day due to the US Veteran’s Day holiday, is expected to show a 600,000 barrel increase in crude stockpiles in the world’s top energy user.
US crude futures inched up 18 cents to $79.46 a barrel by 9:05am, after closing 23 cents higher on Wednesday. Brent crude futures gained 20 cents to $78.15 a barrel.
“The market is adopting a wait-and-see attitude. Certainly the market looks to be overly overbought and what’s holding it up is the continuing weak dollar,” said Mark Pervan, senior commodities analysts at ANZ.
But Pervan also noted there is “reasonably strong demand from China, as seen in the strong trade data.”
Data from industry group American Petroleum Institute released late on Tuesday showed a bigger-than-expected increase in US crude oil stockpiles, up by 1.2 million barrels in the week to 6 November.
In Europe, crude oil inventories rose in October as refiners curbed operation rates amid shrinking demand. Positive data from China continued to offer some support. Chinese crude imports hit the second-highest level in October, signaling that oil demand continues a gradual revival from a sharp slowdown in late 2008 and early this year.
Also backing prices was a weak dollar, which hovered just above a 15-month low after the Australian dollar jumped on strong jobs data.
A string of speeches on Tuesday by officials of the Fed - the US central bank - reinforced the view that US interest rates will remain near zero for the foreseeable future, increasing the appeal of higher-yielding assets..
Although Opec raised its forecast for world oil demand growth slightly, the oil cartel said fuel consumption might not return to levels seen before the global economic slowdown, even if growth recovers.
In its monthly report on Wednesday, Opec said 2010 oil demand growth would be 750,000 bpd, compared with its previous projection of 700,000 last month.
Oil companies were also quickly restoring Gulf of Mexico production shut by Tropical Storm Ida, the US Minerals Management Service said.