Pumping Fuel

Oil prices have increased over reports of strong economic data in Japan and a drop in US crude inventory figures.

Brent crude oil futures edged up 36 cents at $40.62 a barrel, while the US West Texas Intermediate (WTI) crude futures rose 35 cents and traded at $37.86 per barrel, Reuters reported.

In October, core machinery orders in Japan increased and reforms that are aimed at encouraging imports in China helped improve the outlook for demand in Asia.

Crude oil prices also gained support from a 1.9 million barrel fall in US inventories to 488 million barrels.

"Brent crude prices will continue to struggle due to a large global commercial oil stock surplus."

Traders are keenly watching for data to be released by the US Energy Information Administration.

Japan’s annualised gross domestic product (GDP) increased 1% in the three months ended 30 September from the previous quarter.

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According to preliminary figures, GDP dropped 0.8%.

In its European oil market forecast PIRA Energy said: "Brent crude prices will continue to struggle due to a large global commercial oil stock surplus, which PIRA estimates will total 500 million barrels above normal levels by end 2015.

"Oil markets are likely to run out of onshore crude storage in 1Q16. Brent will perform better than WTI over the very short-term."

Image: US crude increased last week due to a 1.9 million barrel drop in inventories. Photo: courtesy of Michelle Meiklejohn/FreeDigitalPhotos.net.