In Thursday’s electronic trading session crude oil future prices climbed higher. This added a bit more to the previous session strong rally. Additional support came from the weaker dollar and unexpected drop in US gasoline inventories.
In Asian trading hours, the US crude oil for delivery in June rose by 0.4% gaining 39 cents to trade at $91.82 per barrel. Yesterday in regular New York Mercantile Exchange, the contract recorded a 2.5% rebound. This was the highest futures close in half a month.
The rival London-traded Brent North Sea crude climbed by 0.4% adding 38 cents to trade at $102.11 per ounce. The gains were similar to the June contract ones.
The gains were on the back of several advancement drivers. The most significant factors were the weaker US dollar and rising stock indexes from Asia.
On late Wednesday the ICE dollar index tumbled from 82.930 to 82.749. Falling dollar tend to propel dollar-denominated commodities such crude oil. That is mostly because holders of other currencies find these commodities much cheaper.
US gasoline stocks fell by 3.9 million barrels. The numbers are almost 10 times higher than the ones analysts have expected. A number of refinery issues appeared in the Gulf Region. This is one of the explanations which analyst render to the disappointing data.
Meantime, Citi futures analysts think that the Wednesday crude gains may an outcome of technical trading. They also mentioned the weekly government report on US crude-oil inventories. The showing pointed a rise in supplies, yet weaker than projected. Though, according to Citi the advance is not entirely based on supply/demand fundamentals.
Speculation around ECB also strengthened oil prices. The European Central Bank could be the next major central bank to issue an interest rates cut. According to Tradition Energy analyst there are enough conditions to trigger European interest rates cut. Therefore worldwide central banks will further pour liquidity into the financial markets.
Yet all of these factors seem equally reliable. The lack of major drives suggests that the ongoing recovery in investor confidence after the crash also played its role. Recently technically-focused traders saw great chance to sell for profit at some higher level as risks worth it.