Oil prices rose for a second day on Thursday on expectations that demand in the U.S., the world’s biggest oil consumer, will improve as refineries try to return to service after outages and as the dollar weakened.
Brent crude futures rose 17 cents, or 0.2%, to $83.20 a barrel at 0510 GMT. U.S. West Texas Intermediate crude futures for April climbed 19 cents, or 0.2%, to $78.10 a barrel. Oil prices rose 1% on Wednesday.
“Oil prices have been resilient thus far, with market participants seemingly eyeing a retest of its year-to-date high following its rally in February,” said Yeap Jun Rong, market strategist at IG, adding that geopolitical tensions provided support.
“That said, gains could be somewhat contained for now, given the higher-than-expected inventories build in U.S. crude stocks from the API figure overnight drove some wait-and-see for the EIA numbers to be released ahead,” Yeap added.
Crude stocks rose 7.17 million barrels in the week ended Feb. 16, market sources citing American Petroleum Institute figures said on Wednesday. Gasoline stockpiles also rose while distillate fuel inventories declined.
U.S. crude inventories have climbed amid outages at large refineries that have left utilisation rates at the lowest level in two years, though the plants are resuming output.
BP’s 435,000 barrel-per-day (bpd) refinery in Indiana, the largest in the U.S. Midwest, will return to full production in March, according to people familiar with plant operations, after a power outage from Feb. 1.
TotalEnergies’ 238,000-bpd refinery in Port Arthur, Texas, is also working to complete a restart, though it is still operating minimally following a weather-related power outage.
Analysts expect U.S. refinery run rates to have risen to 81.5% last week from 80.6% of total capacity in the previous week, according to a Reuters poll.
Investors will keep an eye on the official inventory data from the U.S. Energy Information Administration that is due at 1600 GMT on Thursday, delayed one day by a U.S. holiday.
Crude was also supported by a weaker U.S. dollar, which makes oil less expensive for traders holding other currencies.
The dollar index, which measures the greenback against six major peers, fell to 103.905 at 0510 GMT.
“The retreat in the U.S. dollar for the fourth straight session may also boost the short-term appeal for oil,” said Yeap.
(Reporting by Colleen Howe and Jeslyn Lerh; Editing by Tom Hogue and Christian Schmollinger)