SINGAPORE: Oil prices extended gains in Asian trade on Wednesday after a weekly industry report showed demand for crude increased in the world's largest energy-consuming nation, analysts said.
New York's main futures contract, light sweet crude for delivery in July, rose 17 cents to 72.16 dollars a barrel while London's Brent North Sea crude for July added 15 cents to 72.45 dollars.
"Oil prices were a little bit firmer last night and have steadied around those higher levels in trading this morning," said Sydney-based David Moore, a commodity strategist with the Commonwealth Bank of Australia. He said prices received support from a report by the American Petroleum Institute (API) that showed a larger-than-expected drop in US crude stocks last week.
The report showed stockpiles declined 4.5 million barrels for the week ending June 4, beating expectations of a 1.3 million barrel drop. Moore added investors would be eyeing the US government's weekly report on inventories due later Wednesday for a clearer picture on the demand outlook and other economic indicators in China, the second-largest oil consumer.
"The Chinese trade data due out (Thursday) will indicate the new term direction and the Chinese industrial production data due out on Friday will probably be influential for the market as well," he said.
Oil prices were also helped upward by more positive investor sentiment following remarks by Federal Reserve chairman Ben Bernanke, who said he was not expecting a double dip recession in the world's largest economy.
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