Oil prices rose in thin Asian trade Wednesday, supported by a forecasted fall in US crude supplies, analysts said, while US lawmakers appear to be making progress in fiscal cliff talks.
New York’s main contract, light sweet crude for delivery
in January rose one cent to $87.94 a barrel and Brent North Sea crude for February delivery advanced a cent to $108.85.
Traders were heartened by data released by the
American Petroleum Institute (API) late Tuesday
showing a sharper-than-expected fall in US stockpiles, said
Nick Trevethan, senior commodities strategist at ANZ Research.
“API crude stocks dropped over four million barrels,
which should support oil prices,” he told AFP.
The fall was far steeper than the 1.7 million to 2.3
million barrel drawdown projected by various analysts. A fall in US crude inventories indicates a pickup in energy demand in the world’s largest oil consumer.
The US Department of Energy is due to issue its weekly inventory report later Wednesday.
Confidence has also been boosted by hopes of a breakthrough in Washington on averting the fiscal cliff of tax hikes and spending cuts due to come into effect at the start of January.
The US economy will likely tip into recession if a new deal to cut the country’s deficit with less swingeing measures is not found.
President Barack Obama and Republican House Speaker John Boehner have stepped up negotiations in recent days, with both sides narrowing their differences and providing concessions on spending and taxes.