A Sinopec oil tanker approaches cargo vessel Dongtai Baoze, left, berthed at an anchorage off Zhoushan port to supply it with bunker fuel, in Zhejiang province, China. Picture: REUTERS/STRINGER
A Sinopec oil tanker approaches cargo vessel Dongtai Baoze, left, berthed at an anchorage off Zhoushan port to supply it with bunker fuel, in Zhejiang province, China. Picture: REUTERS/STRINGER

Tokyo — Oil prices rose on Thursday, extending gains from the previous session, as an industry report showing a fall in US crude stockpiles last week added to positive comments by the head of the US Federal Reserve on the US economy.

US West Texas Intermediate crude was up 20 cents, or 0.4%, at $57.32 a barrel by 1.11am GMT, after rising 0.6% on Wednesday.

Brent futures were up 17 cents, or 0.3%, at $62.54 a barrel, having risen 0.5% in the previous session.

Federal Reserve chair Jerome Powell said on Wednesday the US economy would see a “sustained expansion” with the full impact of recent interest rate cuts still to be felt, boosting hopes for increased demand for crude.

Powell’s “rosy view of the US economy reinforces the view that the Fed sees the economy is on a positive track”, said Stephen Innes, chief Asia market strategist at AxiTrader.

US crude inventories fell by 541,000 barrels in the week to November 8 to 440-million, data from the American Petroleum Institute, an industry group, showed on Wednesday, compared with analysts’ expectations for an increase of 1.6-million barrels.

Official data from the US Energy Information Administration is due at 4pm GMT on Thursday. Both reports were delayed a day for the US Veterans Day holiday on Monday.

Concerns have eased over a US recession, though an economic rebound is also not expected any time soon, according to a Reuters poll of economists released on Thursday.

The poll also showed that economists believe the US-China trade war is unlikely to see a permanent truce over the coming year, which may further affect global growth and demand for oil, putting a cap on prices.

Still, Opec secretary-general Mohammad Barkindo said global economic fundamentals remained strong and he remained confident the US and China would reach a trade deal.

Opec and other producers including Russia — a grouping known as Opec+ — have been restraining production since January to try to support oil prices.

Reuters