Oil was steady near a five-month high today as optimism that central banks will shore up economies boosted Asian equity markets, countering an industry report showing US crude stockpiles jumped more than forecast last week.
Front-month US crude yesterday touched $82.99 a barrel, the highest price since early May, after the Bank of Japan (BOJ) cut interest rates, bolstering hopes that the US Federal Reserve will early next month announce a second round of so-called quantitative easing measures to boost growth.
The November contract today gained 2 cents to $82.84 at 6.08am, after falling as much as 0.5 per cent to $82.43. ICE Brent for November shed 2 cents to $84.82.
US crude inventories gained 4.4 million barrels in the week to October 1st, the American Petroleum Institute (API) reported late yesterday, compared with average analyst expectations for a 300,000-barrel increase.
Prices of US crude over the past week topped the $70-$80 range for the first time in almost two months as investors anticipated central banks would embark on a second round of expansionary monetary policy to infuse stamina into an anaemic recovery.
The pace of growth accelerated in the dominant US services sector last month even as it slowed among Chinese and European firms, boosting hopes that the sluggish US economy wasn't stagnating.
But US hiring is still weak and the jobless rate stands at 9.6 per cent. The strong services data may not deter the Fed from trying in coming weeks to boost growth by pumping more money into the economy. Key monthly non-farm payrolls data is due on Friday.
Government statistics on oil inventories and demand will follow from the Energy Information Administration today at 2.30pm.
Stockpiles of gasoline declined 4.1 million barrels, the API said, versus a forecast 200,000-barrel decrease, while supplies of distillate fuels including heating oil and diesel slid 777,000, nearly in line with the expected 900,000-barrel drop.
Equities, metals and Japanese government debt rose today and the dollar fell after Japan's monetary easing moves a day earlier.
The dollar was little changed against a basket of currencies today.
Strikers at France's top oil port blocked more tankers yesterday as their deadlock with management started to hit gasoline supply and threatened to halt refineries in a few days.
The Houston Ship Channel won't reopen until this morning to resume crude shipments to four refineries as 19 tankers awaited entry into the top US petrochemical port, the US Coast Guard said.
Enbridge Inc said yesterday it is plotting a new pipeline to help drain off crude from the Oklahoma storage hub, where brimming tanks have pressured US benchmark crude prices. The new duct could initially move 150,000 barrels a day to the Houston area from Cushing.
Reuters