Brent regains some ground, on weaker dollar
Singapore, May 30, 2013
Brent futures rose towards $103 a barrel on Thursday as the dollar weakened, regaining ground from their biggest slide in almost a month the day before.
The decline in the dollar, under pressure from growing expectations the Federal Reserve will maintain its stimulus for the time being, overshadowed concerns sparked by an industry report showing a surprise rise in US crude and gasoline stockpiles.
Brent crude had gained 22 cents to $102.65 a barrel by 0307 GMT, after settling $1.80 lower in its biggest slide in percentage terms since May 1. US oil climbed 3 cents to $93.16, after ending $1.88 lower.
"We may see some retracement in prices, towards $103 or mid-$103 for Brent," said Ryoma Furumi, a commodity sales manager at Newedge in Tokyo. "But the market will keep a close eye on movements in the forex and equity markets."
A weak dollar boosts oil as it makes commodities priced in the greenback cheaper for holders of other currencies. The previous session's plunge was in part due to a slide in US equity markets.
American Petroleum Institute data on Wednesday showed a 4.4 million barrel increase in US crude inventories for the week to May 24. That was much higher than a Reuters forecast for a fall of 400,000 barrels.
The API reported a 1.9 million barrel build in gasoline stockpiles for the week, led by a nearly 1.2 million barrel increase on the Gulf Coast. Gasoline inventories were forecast to have risen 100,000 barrels for the week.
Investors are now waiting for data from the Energy Information Administration (EIA) later today for more clues on the outlook for US demand.
Brent is expected to rebound to $103.14 per barrel, while US oil is expected to rebound into a range of $94.14-$94.58, according to Reuters technical analyst Wang Tao. - Reuters