Crude Oil Futures on Track for Weekly Gain on U.S. Economic Recovery
Crude Oil Futures on Track for Weekly Gain on U.S. Economic Recovery Reuters

Crude oil prices advanced slightly in Asian trading Thursday after plunging in the previous session following higher-than-expected rise in crude supplies and weak economic reports.

Light sweet crude for May delivery gained 0.02 percent or 2 cents to $94.47 a barrel in electronic trading on the New York Mercantile Exchange during Asian trading hours. Brent crude oil futures for May delivery rose 0.27 percent or 38 cents to $107.48 a barrel on the ICE futures exchange in London.

Oil prices plunged Wednesday as swelling U.S. oil inventories and weak economic data weighed on the demand outlook. Light sweet crude declined to the lowest level in a week, while Brent crude recorded the biggest one day fall in five months.

The sell-off came after payroll firm ADP Employer Services said that the U.S. private sector added fewer jobs than expected in March and the Institute for Supply Management's (ISM) non-manufacturing index showed slower service sector growth, raising concerns over the strength of economic recovery in the world’s largest oil consuming nation.

Meanwhile, swelling U.S. oil inventories amid sluggish demand also sent the oil prices lower. The data from the U.S. Energy Information Administration (EIA) Wednesday showed that crude inventories climbed to the highest level in 22 years. Oil inventories grew 2.7 million barrels to 388.6 million barrels last week, the highest level since July 1990, higher than Reuters' estimate of 2.2 million barrel rise.

Data released by the American Petroleum Institute (API) late Tuesday also showed that crude inventories had increased by 4.7 million barrels in the week ending Mar.29, far higher than Reuters’ estimate of a 2.2 million barrel rise.

"There is now no shortage of oil in the United States or anywhere else, this is very clear, and we can see that the economic recovery is also not as good as we thought it was. There is more uncertainty ahead. As such, we see more downside pressure on oil prices," Ken Hasegawa, a commodity sales manager at Newedge in Tokyo, told Reuters.

On Wednesday, light sweet crude for May delivery plunged 2.8 percent or $2.74 and settled at $94.45 a barrel on the New York Mercantile Exchange, while Brent crude for the May delivery plunged 3.2 percent or $3.58 to settle at $107.11 a barrel.