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Oil prices rise depite higher US crude stocks

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(Globalpost/GlobalPost)

Global oil prices advanced on Wednesday despite news that US oil inventories rose unexpectedly last week, dealers said.

Brent North Sea crude for delivery in July added 76 cents to stand at $103.72 per barrel in late afternoon London deals.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for July, gained 77 cents to $96.15 a barrel.

"Brent crude oil pushed through the $103-per-barrel level despite weekly inventories for oil once again rising," said IG analyst Brenda Kelly.

She added that the weaker dollar -- which makes oil cheaper for buyers using stronger currencies -- was supporting the market.

The US government's Energy Information Administration (EIA) revealed Wednesday that crude inventories rose by 2.5 million barrels in the week ending June 7.

That surprised the market because expectations had been for a modest decline of 400,000 barrels, according to analysts polled by Dow Jones Newswires.

The EIA added that US gasoline or petrol reserves climbed by 2.7 million barrels.

Stocks of distillate, include heating oil and diesel, fell by 1.2 million barrels.

The report is a key focus for the oil market because the United States is the world's number one crude consuming nation.

In earlier deals on Wednesday, the oil market had diverged after a gloomy demand forecast downgrade from the International Energy Agency.

The Paris-based IEA trimmed its forecast for oil consumption, arguing that sluggish global economic growth was crimping demand for oil, including in emerging market powerhouse China.

The IEA predicted that oil demand would expand by 785,000 barrels per day this year to 90.6 million barrels per day (mbpd).

That marked a slight fall of 0.08 percent from the previous forecast.

Prices had already fallen on Tuesday after the Organization of the Petroleum Exporting Countries (OPEC) downgraded its 2013 global demand guidance, and also reported that the cartel increased output in May.

The OPEC oil cartel estimated 2013 global demand at 89.65 million barrels per day, down a notch from its prior forecast of 89.66 mbpd.

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http://www.globalpost.com/dispatch/news/afp/130612/oil-prices-rise-depite-higher-us-crude-stocks