New York, US (BBN) – Crude oil prices rebounded in Asia on Tuesday with industry data on inventories ahead expected to set the near-term tone and comments by the an official with the Paris-based International Energy Agency (IEA) suggesting solid demand from Asia.
“Both the very robust demand growth and declining supply will increase the import requirement of the Asian continent,” Keisuke Sadamori, director of the Energy Markets and Security Directorate, told CNBC.
On the New York Mercantile Exchange crude futures for May delivery rose 0.50 per cent to $47.97 a barrel. On London’s Intercontinental Exchange, Brent gained 0.37 per cent to $51.09 a barrel.
Ahead, the American Petroleum Institute will release its estimates of crude oil and refined product stockpiles at the end of last week, followed by official data from the US Department of Energy on Wednesday.
A 1.183 million barrels build in crude is seen with a 1.106 million barrels fall in distillates and a 1.933 million drop in gasoline stocks.
Overnight, crude settled lower on Monday, as investors questioned whether an OPEC-led production cut would be extended beyond June amid worries over a glut in supply.
Oil prices fell to November lows during the US session, as concerns over a glut in US inventories, continued to weigh on sentiment, despite an agreement from a join committee of ministers from OPEC and non-OPEC oil producers to review whether the current OPEC-led deal to cut production should be extended for an additional six-months.
Investors focused on a significant change in tone from the joint committee, as an earlier draft of the statement had said the committee “reports high level of conformity and recommends a six-month extension” but the final version omitted the recommendation, and called for “a technical group and the OPEC Secretariat to review oil market condition and revert … in April 2017.”
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd) in an effort to combat the oversupply issue that has pressured prices over the last two years.
Investors fear that the sharp increase in US crude and shale production could dampened OPEC’s efforts to rebalance supply and demand in the industry, after a report last week revealed US crude oil stockpiles rose to an all-time high of 533.1 million barrels.