SINGAPORE: Oil prices rose for a second day on Thursday on expectations that demand in the US, the world’s biggest oil consumer, will improve as refineries try to return to service after outages and as the dollar weakened, according to Reuters.
Brent crude futures rose 34 cents, or 0.4 percent, to $83.37 a barrel at 10:40 a.m. Saudi time. US West Texas Intermediate crude futures climbed 37 cents, or 0.5 percent, to $78.28 a barrel.
“Oil prices have been resilient thus far, with market participants seemingly eyeing a retest of its year-to-date high following its rally in February,” said Yeap Jun Rong, market strategist at IG, adding that geopolitical tensions provided support.
“That said, gains could be somewhat contained for now, given the higher-than-expected inventories build in US crude stocks from the API (American Petroleum Institute) figure overnight drove some wait-and-see for the EIA (Energy Information Administration) numbers to be released ahead,” Yeap added.
Crude stocks rose 7.17 million barrels in the week ended Feb. 16, market sources citing API figures said on Wednesday. Gasoline stockpiles also rose while distillate fuel inventories declined.
US crude inventories have climbed amid outages at large refineries that have left utilization rates at the lowest level in two years, though the plants are resuming output.
BP’s 435,000 barrel-per-day refinery in Indiana, the largest in the US Midwest, will return to full production in March, according to people familiar with plant operations, after a power outage from Feb. 1.
TotalEnergies’ 238,000-bpd refinery in Port Arthur, Texas, is also working to complete a restart, though it is still operating minimally following a weather-related power outage.
Analysts expect US refinery run rates to have risen to 81.5 percent last week from 80.6 percent of total capacity in the previous week, according to a Reuters poll.
Investors will keep an eye on the official inventory data from the US EIA that is due at 7:00 p.m. Saudi time on Thursday, delayed one day by a US holiday.
Crude was also supported by a weaker US dollar, which makes oil less expensive for traders holding other currencies.
The dollar index, which measures the greenback against six major peers, fell to 103.905 at 8:10 a.m. Saudi time.
“The retreat in the US dollar for the fourth straight session may also boost the short-term appeal for oil,” said Yeap.
