SINGAPORE, Sep 17 – Oil turned higher in Asian trade Thursday, boosted by a rise in equities markets on optimism over the global economic recovery, analysts said.
New York\’s main contract, light sweet crude for October overcame a bout of profit-taking earlier in the day to trade 17 cents higher at 72.68 dollars a barrel in the afternoon.
Brent North Sea crude for November delivery was up one cent at 71.68 dollars.
Japanese share prices closed 1.68 percent higher Thursday to lead the rise in Asian stock markets, tracking gains on Wall Street where stocks climbed to the highest level in 11 months on upbeat factory data.
US industrial production jumped 0.8 percent in August, the second straight monthly gain, the Federal Reserve reported Wednesday in a further sign of a reviving manufacturing sector.
Overall industrial output gained for a second month in August after eight consecutive monthly declines.
Analysts also said that a sharper-than-expected drop in US crude stockpiles was seen as an indication that oil demand was improving in the world\’s biggest energy user.
Data released Wednesday by the US Department of Energy showed the country\’s crude stocks dropped by 4.7 million barrels in the week to September 11, beating analysts\’ forecast for an average decline of 2.5 million barrels.
The drop in inventories "caused the rally in crude oil but in addition to that, the reaction of the stock market based on economic data is really what made the oil market rally during the day," said Andy Lipow of Lipow Oil Associates.
US Federal Reserve chairman Ben Bernanke said earlier this week the economy had turned a corner but cautioned that the pace of growth remained weak.
"Even though from a technical perspective the recession is very likely over at this point, it\’s still going to feel like a very weak economy for some time as many people will still find that their job security and their employment status is not what they wish it was," he said.
"So that\’s a challenge for us and policymakers going forward," he added in response to a question at a Washington forum Tuesday.