US oil prices rose for a fifth straight day as concerns over global storage capacity eased ahead of weekly industry data, while Asia stocks were buoyed by gains for Wall Street.
The rise for US crude came despite a decision by the Texas Railroad Commission, the state’s oil and gas regulator, to drop an effort to force producers to cut output after running into opposition from energy companies.
West Texas Intermediate, the US marker, was up 6.6 per cent at $21.74 a barrel in Asia on Tuesday, putting it on track for a fifth consecutive daily rise. Brent crude, the international benchmark, was up 4.8 per cent at $28.50.
Oil prices have been under heavy pressure in recent weeks from a collapse in demand due to the coronavirus pandemic, with WTI at one point slumping into negative territory as producers paid buyers to take product they could not store.
Robert Rennie, global head of market strategy at Westpac, said US oil prices were getting a boost from a report by energy information group Genscape that reserves at the key oil storage centre of Cushing, Oklahoma had risen only 1.8m barrels last week.
If confirmed by data from the American Petroleum Institute, due out later on Tuesday, this would mark the smallest increase since mid-March.
But Mr Rennie cautioned that inventory naturally built at a slower pace as storage tanks came close to capacity. “I’m not convinced that this is anything other than a short-term improvement in sentiment that will ultimately give way to increasing concern about storage,” he said.
Asia equities made modest gains, with markets in Japan, China and South Korea closed for public holidays.
Hong Kong’s benchmark Hang Seng index was up 0.5 per cent while Australia’s S&P/ASX 200 rose 1.5 per cent.
Futures markets pointed to a rise of 0.9 per cent for the S&P 500 when trading begins on Wall Street on Tuesday. In the UK the FTSE 100 was expected to rise 1.5 per cent.
Traders were encouraged after Wall Street staged a late-session comeback to notch a slight gain despite concerns over a resurgence in US-China tension. The S&P 500 closed up 0.4 per cent while the tech-heavy Nasdaq advanced 1.2 per cent.
Sentiment was also brighter after New York Governor Andrew Cuomo suggested part of the state could end its most stringent lockdown measures by mid-May.
On Monday New York state reported its lowest daily coronavirus death toll since the end of March, a drop-off that helped bring daily fatalities across the US below 1,000 for the first time in more than a month.