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Oil prices edge towards $50 after U.S. crude stocks slump

Published 2016-05-25, 08:47 p/m
© Reuters. Oil prices edge towards $50 after U.S. crude stocks slump
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By Keith Wallis
SINGAPORE, May 26 (Reuters) - Oil prices inched towards $50
a barrel in early Asian trade on Thursday, after U.S. government
figures showed a sharper-than-expected drawdown of crude stocks
last week as imports dropped.
Buoyant stock markets also supported prices, with the Dow
Jones industrial average .DJI , the S&P 500 .SPX and the
Nasdaq Composite .IXIC all climbing overnight.
But gains in oil were capped as the U.S. dollar hovered near
an eight-week high against a basket of currencies .DXY .
U.S. crude futures CLc1 had risen 5 cents to $49.61 a
barrel by 0045 GMT. They settled the last session 94 cents
higher, after marking a seven-month high of $49.62.
Brent LCOc1 climbed 5 cents to $49.79 a barrel, having
closed up $1.13, or 2.3 percent, in the previous session.
"I wouldn't be surprised to see the rally extend a bit
further," said Ric Spooner, chief market analyst at Sydney's CMC
Markets.
"There's a decent chance it will breach $50 a barrel (later
on Thursday)."
U.S. crude stocks fell 4.2 million barrels to 537.1 million
in the week to May 20, the steepest weekly drop in seven weeks,
the U.S. Department of Energy's Energy Information
Administration said on Wednesday. EIA/S
That was larger than analyst expectations of a 2.5 million
barrel fall, but not as much as the 5.1 million expected by
trade group, the American Petroleum Institute.
Gasoline stocks rose 2 million barrels to 240.1 million
barrels against forecasts of a 1.1 million-barrel drop, the EIA
said.
Stockpiles of distillates, which include diesel and heating
oil, declined by 1.3 million barrels to 150.9 million, according
to the EIA.
Crude oil imports fell 4.7 percent to 7.3 million barrels
per day last week, the EIA said.

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