Global oil prices regained ground on Thursday in Asia, lifted by a weaker greenback and bargain-hunting, but the mismatch in supply and demand remained a drag on sentiment.
The WSJ Dollar Index BUXX, -0.03% was last down 0.4% at 87. A weaker dollar usually helps oil prices rise because oil transactions are U.S. dollar denominated, and buyers with other currencies will get more oil for their spending.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in October CLV6, 0.07% traded at $45 a barrel, up $0.29, or 0.7%, in the Globex electronic session. November Brent crude LCOV6, -2.75% on London’s ICE Futures exchange was flat at $47.04 a barrel.
Overnight U.S.-priced oil prices dropped more than 3% following a bigger-than-expected build in U.S. oil inventories last week.
Weekly data from the U.S. Energy Information Administration showed U.S. crude stocks grew by 2.3 million barrel to 1.2 billion barrels in the week ended Aug. 26. The overall inventories of crude and refined products currently stands at 1.4 billion barrels.
“Crude stocks have built counter-seasonally in five of the last six weeks; the key driver has been crude imports, which have increased more than crude production has declined,” said Michael Wittner, the chief analyst at Societe Generale.
EIA data also showed U.S. crude imports averaged over 8.5 million barrels a day, 11.4% above the same four-week period last year.
Volatility has dominated that oil market in the past few weeks. Investors and traders were first encouraged by the fact members of the Organization of the Petroleum Exporting Countries have agreed to meet later this month in Algeria to discuss measures to stabilize prices.