Oil prices up ahead of US stockpiles report

Oil prices up ahead of US stockpiles report
In this August 21, 2013 file photo shows an oil well near Tioga, North Dakota.

SINGAPORE - Oil prices edged higher in Asia Wednesday on bargain-hunting, but gains were capped by concerns about tepid demand in the United States, analysts said.

US benchmark West Texas Intermediate (WTI) for September delivery rose 10 cents to US$97.48 (S$121.70) while Brent crude gained 25 cents to US$104.86 in afternoon trade.

WTI prices closed lower in New York for the sixth time in seven days Tuesday as traders looked ahead to Wednesday's weekly US energy inventory report.

Singapore's United Overseas Bank said the report is likely to paint a less than rosy picture of demand in the world's top crude consumer.

Analysts polled by the Wall Street Journal said crude stockpiles are expected to have fallen 1.7 million barrels on average in the week to August 1.

Gasoline stockpiles are expected to rise by 100,000 barrels while stocks of distillates, including heating oil and and diesel, are also expected to have increased by 600,000 barrels.

Refinery use is expected to have fallen by 0.5 percentage points to 93.0 per cent of capacity.

Market watchers believe refineries will soon scale back output ahead of the end of the summer driving season in early September, reducing demand for crude oil.

Investors are also continuing to keep a close watch on conflicts in Middle East crude producers.

Escalating violence in Libya, a member of the OPEC oil-producing cartel, is threatening efforts to restore production that had been disrupted last year by rebels.

Fighting is also raging in Iraq, where jihadists have overrun much of the country's Sunni heartland after launching an offensive from neighbouring Syria on June 10.

Iraq is the second biggest producer in the 12-nation OPEC, pumping 3.4 million barrels a day and possessing more than 11 per cent of the world's proven reserves.

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