By Meeyoung Cho
SEOUL (Reuters) – Oil prices climbed early on Thursday on an unexpected fall in U.S. crude inventory last week, but a stronger dollar dragged.
U.S. crude’s front-month contract had risen 59 cents to $ 39.19 a barrel by 0115 GMT, after settling down 71 cents, or 1.8 percent, at $ 38.60 a barrel on Wednesday.
Front-month Brent, the global oil benchmark, gained 64 cents to $ 43.78 a barrel, having ended down 7 cents at $ 43.14.
“The local region is … shrugging off some of the currency impact, instead pricing in the draws on inventory and a better than expected industrial outlook,” said Michael McCarthy, chief market strategist at CMC Markets in Australia.
U.S. crude inventories fell 5.5 million barrels in the week to Aug. 21, the biggest one-week decline since early June, data from the Energy Information Administration showed on Wednesday. That was in line with the industry group the American Petroleum Institute’s late-Tuesday report.
Analysts had expected an increase of 1 million barrels.
In other financial markets, a rebound on Wall Street helped soothe investors’ tattered nerves, while the dollar rallied as risk aversion eased.
Data released on Wednesday showed U.S. non-defence capital goods orders excluding aircraft increased 2.2 percent in July, the biggest rise since June last year and handily beating expectations.
(Reporting by Meeyoung Cho; Editing by Joseph Radford)
