Crude oil prices advanced and hovered above $93 a barrel during the Asian trading hours Wednesday after the U.S. crude stockpiles increased far less than expected.
Light sweet crude for February delivery gained 0.21 percent or 20 cents to $93.48 a barrel in electronic trading on the New York Mercantile Exchange during the Asian trading hours. Brent crude oil futures for the February delivery rose 0.34 percent or 37 cents to $110.67 a barrel on the ICE futures exchange in London.
Crude prices got support after an inventory report late Tuesday showed a smaller-than-expected rise in the U.S. crude stockpiles last week. The American Petroleum Institute (API) said crude inventories had increased by 46,000 barrels in the week ending Jan.11, far less than analysts’ estimation for a 2.3 million barrel rise.
Sentiment was also supported by an encouraging December U.S. retail sales data. Report released by the Department of Commerce showed that retail sales rose 0.5 percent in December compared to 0.4 percent increase in November, indicating signs of economic recovery in the world’s largest oil consuming nation and raised expectation of a hike in fuel demand.
Meanwhile, traders are on the optimistic side ahead of China’s fourth quarter and full year GDP data. The GDP numbers are due to be released Friday and is expected to show that the world’s second largest oil consuming nation’s growth picked up in the last quarter of 2012, putting to rest any remaining doubt about China escaping a hard landing.
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“US retail sales are important data, but not that substantial to trigger a rally in oil prices. The market is looking for more positive factors to push prices higher and till then prices will trade in a tight range. I think China’s economy has bottomed out. The downside risks to China have reduced and the economy is likely to show signs of improving,” Tetsu Emori, a commodities fund manager at Astmax Investments in Tokyo, told Reuters.
After the markets open Wednesday, the U.S. Energy Information Administration (EIA) is due to report weekly inventory data that are expected to show that stockpiles increased by 2.27 million barrels last week.
On Tuesday, Light sweet crude for the February delivery declined 0.9 percent or 86 cents and settled at $93.28 a barrel on the New York Mercantile Exchange, while Brent crude for the February delivery, which expires Wednesday, fell 1.4 percent to $110.30 a barrel.