ANN/THE STAR – Oil prices recovered in Asian trading yesterday on heightened Middle East tensions, but gains were capped by weak demand.
Brent crude futures rose USD0.17, or 0.16 per cent, to USD76.60 a barrel by 0615 GMT. United States (US) West Texas Intermediate crude rose USD0.17, or 0.23 per cent, to USD73.37.
Hamas named its Gaza leader Yahya Sinwar as successor to assassinated former chief Ismail Haniyeh on Tuesday, a move that reinforces the radical path pursued since October 7.
“The uptick in oil prices could possibly be driven by expectations of heightened supply risks due to rising Middle East tensions and a correction from the multi-month low of oil prices.
The bearish demand sentiments still remain, and are expected to cap the upside on oil prices,” said Vortexa’s head of Asia oil analysis Serena Huang.
Supporting the bearish demand view, Chinese trade data showed that its July daily crude oil imports fell to the lowest level since September 2022.
The broader price recovery came after prices slipped earlier in the trading session, following US data showing an unexpected build in crude oil and gasoline inventories. US crude oil, gasoline and distillate inventories rose last week, according to market sources citing American Petroleum Institute figures on Tuesday.
The API figures showed crude stocks were up by 176,000 barrels in the week ended August 2, the sources said, speaking on condition of anonymity. Analysts polled by media had expected crude stocks to fall by 700,000 barrels.
Gasoline inventories rose by 3.313 million barrels against analysts’ expectations for a one million barrels draw, while distillate stocks rose by 1.217 million barrels, a bigger build than anticipated.
The US Energy Information Administration is due to release weekly inventory data.
On Monday, Brent futures slumped to their lowest since early January and WTI futures touched their lowest since February, as a global stock market rout deepened on growing concerns of a potential recession in the US, the world’s largest petroleum consumer.
