Oil rebounds in Asian trade on surprise inventory falls

November 18, 2010 | 09:50

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Oil prices rebounded in Asian trade on Thursday on reports of falling crude inventories in the US, after plunging more than seven dollars during the week, analysts said.

New York's main contract, light sweet crude for delivery in December, gained 61 cents to $81.05 per barrel after falling $7.37 since four sessions ago.

Brent North Sea crude for January delivery rose 47 cents to $83.75.

US Department of Energy data released late Wednesday -- showing a surprise drop in crude and gasoline stockpiles -- was pushing oil markets up, said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore.

"The inventory report which shows declines in crude stocks and also product stocks is generally supportive and therefore we have a reaction to the inventory report," he said.

American crude inventories tumbled by 7.3 million barrels in the week to November 12, the department revealed Wednesday.

That was the biggest weekly drop for 15 months and much weaker than the 100,000-barrel decline expected by the market.

Gasoline reserves sank by 2.7 million barrels although analysts had predicted a smaller drop of 600,000 barrels.

Recent falls in crude prices were also enticing people to buy up crude, Shum said.

"Some people view it as a buying opportunity," he said.

AFP

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