SINGAPORE- Oil prices extended gains in Asia Thursday after a bullish US stockpiles report raised hopes of resurgent demand in the world’s top crude consumer, analysts said.
US benchmark West Texas Intermediate for August delivery rose 24 cents to $101.44 while Brent crude for September gained two cents to $107.19 in afternoon trade.
WTI surged $1.25 in New York Wednesday after the US Energy Information Administration (EIA) said reserves fell 7.5 million barrels in the week to July 11.
The drop outstripped analysts’ expectations of a 2.6 million barrel decline.
“The strong, better-than-expected US stockpiles data is giving significant help to oil prices at the moment,” David Lennox, resource analyst at Fat Prophets in Sydney, told AFP.
The EIA’s inventory report also showed a rise in refinery utilization in the United States, indicating plants are using more crude to increase gasoline production to keep up with the summer driving season.
Investors are also keeping a close watch on crisis-stricken crude producers in the Middle East, analysts said.
Libyan exports are expected to return to global markets after the government earlier this month announced that it had regained control of two ports previously blockaded by rebels demanding autonomy in the country’s east.
The ports at Ras Lanuf and Al-Sidra could add about 500,000 barrels of crude per day to global markets, analysts say.
In Iraq, a jihadist-led militant offensive has so far not reached the country’s southern region which is home to the bulk of its vast oil industry.
“Until we see those issues fully resolved and the threat of supply disruptions fully removed, traders are going to continue to have Libya and Iraq on their minds,” Lennox said.
“With Libya, there is some uncertainty about whether the exports will actually restart as expected. There have been several false starts already,” he added.