Oil Futures Lack Direction in Asia After Overnight Gains

By Biman Mukherji Features Dow Jones Newswires

Oil futures were lacking direction in Asia trade on Thursday, following overnight gains on sizeable declines in U.S. crude inventories.

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U.S. crude oil inventories fell by 6.5 million barrels to 1.15 billion barrels, according to the Energy Information Administration. Crude stocks typically decline during the summer season, but the size of recent draws has been larger than usual, says S&P Global Platts in a report.

However, the inventory data's positive effect was partly offset as gasoline inventories rose 3.4 million barrels to 231.1 million barrels in the week ended Aug. 4.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in September rose 1 cent to $49.57 a barrel. October Brent crude gained 6 cents, at $52.76.

"Too much is being read into the gasoline data. We still expect market to tighten in the second half of the year and push into high 50 dollars," says Daniel Hynes, commodities analyst with ANZ Bank.

He said investors are trading cautiously as they don't think the data was convincing enough yet to show that the market is in tightening mode.

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The Organization of Petroleum Exporting Countries, the main oil industry cartel, has reiterated that a 24-nation pact on production caps will remain in force until March. But questions remain as to whether U.S. shale oil producers will continue to add output, buoyed by higher prices.

Investors are also nervous about escalating tensions between U.S and North Korea, which has weighed on a broad range of commodities except safe haven assets like gold.

Nymex reformulated gasoline blendstock -- the benchmark gasoline contract -- rose 0.3% to $1.6261 a gallon. Ice Gasoil rose 0.1% at $487.5/ton, while heating oil traded at $1.6541, up less than 0.1%.

Write to Biman Mukherji at biman.mukherji@dowjones.com

(END) Dow Jones Newswires

August 10, 2017 00:21 ET (04:21 GMT)