SINGAPORE- Oil prices, which saw sharp losses earlier this week, climbed in Asia Thursday after a smaller-than-expected increase in US stockpiles rekindled optimism about demand in the world’s top crude consumer.
US benchmark West Texas Intermediate for December delivery rose 18 cents to $78.86 while Brent crude for December was up 13 cents to $83.08 in afternoon trade.
The gains add to those seen late Wednesday when WTI jumped $1.49 and Brent climbed 13 cents.
Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at business consultancy firm EY, said the upbeat US stockpiles data released Wednesday “provided some relief”.
The US Department of Energy said inventories grew by 500,000 barrels in the week ending October 31, much fewer than the 2.2 million barrels expected by analysts.
Supplies at the closely watched Cushing, Oklahoma, terminal fell 600,000 barrels, and gasoline stockpiles dipped by 1.4 million barrels, topping forecasts of a drop of 300,000 barrels.
The data also showed refineries were operating at 88.4 percent of their capacity, compared with 86.6 percent the prior week, suggesting more demand for oil in the world’s biggest economy.
The price rebound comes after a massive sell-off on Tuesday which took WTI to its lowest close since October 2011 and Brent to its lowest since October 2010.
The plunge was triggered after top producer Saudi Arabia cut its prices for crude sold to the US market.
Analysts interpreted the move as an effort to maintain market share as it faces competition from cheaper oil from US shale fields.
“In the absence of any negative geopolitical events, crude oil prices are likely to continue to remain soft until end of this year,” Gupta said.