Oil prices rise despite jump in US stockpiles
World oil prices advanced Wednesday despite news of a stronger-than-expected increase in crude inventories in the United States, analysts said.
US benchmark West Texas Intermediate for delivery in May rose 86 cents to $48.37 a barrel compared with Tuesday's close.
Brent North Sea crude for May added 87 cents to $55.98 in London late afternoon deals.
The US government's Department of Energy (DoE) announced that commercial crude reserves rallied 8.2 million barrels in the week to March 20.
That was far more than market expectations for a gain of 4.7 million barrels, according to analysts polled by Bloomberg.
Rising inventories tend to push prices lower because they indicate weakening demand in the world's biggest crude consuming nation.
"It is a bit peculiar," said Natixis analyst Deshpande Abhishek in response to rising oil prices.
"Markets might be positioning themselves ahead of the potential expected slowdown in US oil production growth.
"Demand is strong in (the) United States, and Europe seems to be improving.
"General weakness in dollar is also supporting oil (prices) to a certain extent."
The weaker greenback makes dollar-priced commodities cheaper for buyers using stronger currencies, which tends to stimulate demand and lift price levels.
"We are seeing the weaker dollar help trigger a small commodity sector revival at the moment," added Saxobank analyst Ole Hansen.
Oil stockpiles in the United States have risen for the past 10 weeks in a row, putting further downward pressure on prices in the face of a global supply glut, with the OPEC crude producing cartel also maintaining elevated output levels.
"Inventories remain crucial in judging the oversupply issue," Daniel Ang, an investment analyst with Phillip Futures in Singapore, said in a market commentary.
Data showing an unexpectedly sharp manufacturing slowdown in China is also weighing on sentiment.
China's manufacturing activity contracted in March at its fastest rate in 11 months, British banking giant HSBC said, suggesting worsening conditions in the world's number two economy.
HSBC's preliminary purchasing managers index dipped to 49.2 in March from 50.7 in February.
A number below 50 indicates contraction, and anything above 50 points to growth.
© 2015 AFP