SINGAPORE: Oil prices held above $50 in Asia on Wednesday as traders awaited US inventory data and the dollar remained weak, boosting demand for the commodity.
“The WTI crude oil price closed above the $50 mark for the first time in eight months, resulting in a cheerful rally in energy stocks,” said Margaret Yang, an analyst at CMC Markets in Singapore.
The market is expecting US Department of Energy weekly crude inventory numbers to drop further after recent losses, with an anticipated fall of 3.25 million barrels, she added in a note.
At about 0400 GMT Wednesday, US benchmark West Texas Intermediate (WTI) for July delivery was up 11 cents at $50.47 a barrel while Brent North Sea for August delivery was up three cents at $51.47.
Oil has mounted a dramatic rebound since it fell to historical lows in January and February when crude was in free fall to nearly $25, prices not seen since 2003.
But the commodity is still far short of peaks of over $100 in mid-2014, before an economic slowdown and supply glut set in.
US dollar weakness is also a key factor in this week’s oil bounce.
Federal Reserve chief Janet Yellen said Monday that despite a weak jobs report, the US economy was on track towards recovery, and any hike in borrowing costs would be gradual.
“Markets digested Yellen’s seemingly dovish comments, with risk appetite tentatively making a comeback,” IG analyst Bernard Aw wrote in a note.
Crude output has also been dented in recent weeks by wildfires in Canada and unrest in Nigeria, blunting the failure of major world oil producers to impose production caps. AFP