Oil rises to near $84 on US crude supply drop

Oil rises to near $84 on US crude supply drop


Singapore: Oil prices rose to near $84 a barrel on Thursday in Asia as a report showed US crude supplies dropped unexpectedly last week, suggesting demand may be improving.

Benchmark oil for November delivery was up 75 cents to $83.76 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained $1.34 to settle at $83.01 on Wednesday.

The American Petroleum Institute said late Wednesday that crude inventories fell 4 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had forecast an increase of 1.5 million barrels. Inventories of gasoline and distillates also fell, the API said.

The Energy Department’s Energy Information Administration reports its weekly supply data later Thursday.

A global stock market rally and a weakening dollar have helped boost oil prices from the mid-$70s last month. The Dow Jones industrial average rose 0.7% Wednesday and all major Asian equity indexes advanced Thursday. Meanwhile, the euro jumped to $1.4074 on Thursday from $1.3955 and the dollar dropped to ¥81.29 from ¥81.79.

Investors are also expecting the US Federal Reserve to soon boost monetary liquidity in a bid to spur lending and economic growth.

“We look for the financial markets to keep pricing in a very aggressive effort toward monetary easing that should keep energy in high demand as an asset class," Ritterbusch and Associates said in a report.

In other Nymex trading in November contracts, heating oil rose 1.32 cents to $2.3119 a gallon and gasoline gained 0.79 cent to $2.174 a gallon. Natural gas fell 2.5 cents to $3.671 per 1,000 cubic feet.

In London, Brent crude added 61 cents to $85.25 a barrel on the ICE Futures exchange.