Oil prices held most of the previous day’s strong gains today, but while a dive in US gasoline stockpiles fuelled hopes for a pick-up in demand, traders remain on edge over the long-running supply glut.
Both main contracts soared yesterday, with US benchmark West Texas Intermediate hitting a more than three-month high and Brent breaking 41 after the US energy department report.
The figures showed gasoline inventories plunged three times faster than expected while the country’s commercial crude stockpiles rose almost two-thirds less than forecast.
WTI put on 4.9 per cent and Brent 3.6 per cent soon after the data.
Today WTI eased five cents to USD 38.24 and Brent dipped 14 cents to USD 40.93.
Analysts said it remains to be seen whether the price rise would be sustained, especially after China this week reported a plunge in exports in February, stirring renewed fears of a “hard landing” for the world’s second biggest economy.
“I’m still not leaning towards prices moving up sustainably because the fundamentals have not changed,” said Phillip Futures analyst Daniel Ang.