SINGAPORE: Oil prices climbed in Asia on Thursday but lingering worries over the crude supply glut held down gains sparked by stronger US demand and a falling dollar, analysts said.
US benchmark West Texas Intermediate for September delivery turned higher in afternoon trade, rising 10 cents to $43.40. Brent crude for September gained 15 cents to $49.81.
Prices had moved off six-year lows on Wednesday on news that US crude supplies fell—a sign of stronger demand in the world’s top oil consumer—and the dollar declined.
The US Department of Energy Wednesday said the estimated amount of crude oil in the country’s commercial storage tanks tumbled 1.7 million barrels to 453.6 million barrels in the week ending August 7.
The report also said US domestic oil production fell 70,000 barrels a day to about 9.4 million barrels, which is positive for oil prices in an oversupplied market.
The dollar took a hit after China’s surprise move to devalue the yuan, with analysts saying this could delay plans by the US central bank to raise interest rates, a move previously expected as early as September.
A weaker US currency makes dollar-priced oil cheaper for holders of other units, perking up demand and supporting prices.
But analysts said oil prices were being weighed down by continued concerns over a glut in the world crude market.
“The market is just bearish overall,” said Daniel Ang, an investment analyst with Phillip Futures in Singapore.
“There’s still no big change to the supply and demand fundamentals in the oil market,” he told AFP.
Sanjeev Gupta, who heads the Asia Pacific oil and gas practice at professional services organization EY, said the decline in the yuan has “also raised doubts on China’s appetite”
for commodities, including oil.
China is the world’s second-biggest economy and its top energy consuming nation.