Oil prices rose Wednesday as dealers predicted that the latest US crude stockpiles and production data will point towards upbeat demand in the world’s top crude consumer, analysts said.
US benchmark West Texas Intermediate for September delivery gained 29 cents to $46.03 a barrel compared with Tuesday’s close.
Brent North Sea crude for September was up 41 cents to $50.40 around midday in London.
Prices had skidded for three consecutive sessions before rising modestly on Tuesday ahead of the US Energy Information Administration’s release of the latest US stockpiles figures later Wednesday.
“We should be seeing drops to US crude production. This should help support the market in the longer run,” said Daniel Ang, investment analyst at Phillip Futures in Singapore.
Last week’s data showed crude inventories slid to 459.7 million barrels in the week to July 24, the lowest level since March. Production stood at 9.41 million barrels a day during the same period, the slowest pace in more than two months.
A dip in US crude inventories typically indicates strong demand in the country, the world’s top crude consumer and second largest energy consumer after China.
Dealers have been hoping that an uptick in US demand, coupled with a slowdown in output, could whittle down the huge global supplies that were a key reason for the collapse in prices from more than $100 in June last year.
Traders are also looking ahead to Friday’s US jobs report for July, which could lift the dollar if traders conclude the Federal Reserve is likely to raise interest rates more quickly.
A strong greenback discourages crude purchases outside the US because oil is priced in dollars.