US Crude Oil Gains In Asia On Weak Dollar EIA Data, Market Looks To Davos

Investing.com – US crude oil prices held gains in Asia on Thursday as a weak dollar and US weekly inventory data offered support with the market poised for more policymaker fireworks from Davos where US Secretary of the Treasury Steven Mnuchin will speak later in the day in an expected follow up to his weak greenback comments overnight.

On the New York Mercantile Exchange crude futures for March delivery rose 0.37% to $65.85 a barrel, while on London’s Intercontinental Exchange, was last quoted down 0.03% to $70.72 a barrel.

Overnight, crude oil prices settled sharply higher as data showing US domestic production fell for the tenth-straight week offset a rise in production to nearly 10 million barrels a day.

Inventories of fell by roughly 1.071 million barrels for the week ended Jan. 19, beating expectations for of a draw of one million barrels.

Gasoline inventories – one of the products that crude is refined into – rose by 3.1 million barrels, well above expectations for a rise of 2.49 million barrels, while supplies of distillate – the class of fuels that includes diesel and – unexpectedly rose by 639,000 barrels, confounding expectations for a decline of 1.471 million barrels.

The tenth-straight weekly draw in crude supplies surprised some market participants as the American Petroleum Report (API) released Tuesday showed crude supplies unexpectedly rose by 4.8 million barrels, while a weaker dollar was also said to be a supportive factor for the sharp uptick in oil prices.

Rising US domestic oil production, which many fear could halt the rally in the oil market, inched closer to an unprecedented 10 million barrels per day. U.S. oil production rose to nearly 9.9 million barrels a day last week, the EIA said.

Russia and Saudi energy ministers, Alexander Novak and Khalid al-Falih, both said the markets were too focused on the swings in U.S. shale production, which represented only a modest portion of the global output.

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