Crude oil prices edged up in early Asian trading on Thursday as demand was estimated to have remained strong despite slowing economic growth in Asia, and as Russian and western air campaigns in Syria worried markets.
Traders said that a political risk premium has re-entered oil markets over Syria, where Russia and the United States are both carrying on bombing campaigns without coordination, triggering fears of unintentional clashes.
“U.S. markets are also seeing a first impact of that hurricane heading America’s way and we’ve seen some speculative buying of WTI to prepare for the case it impacts Gulf (of Mexico) production,” one broker said.
Hurricane Joaquin strengthened in the Atlantic on Wednesday and could become a major storm, the U.S. National Hurricane Center said, although forecast models did not agree on whether it would make landfall in the United States.
U.S. West Texas Intermediate (WTI) futures were at $45.64 a barrel at 0201 GMT, up 55 cents from their last settlement. Brent crude futures were at $48.71 per barrel, up 34 cents.
World oil demand surged in the first six months of 2015 compared with the same period in 2014, responding to a halving in the price of crude and significant declines in the price of most fuels in most consuming countries, according to national estimates submitted to the Joint Oil Data Initiative (JODI).
JODI reported consumption averaged 71.4 million barrels per day (bpd) in the first six months of 2015, up from 69.1 million bpd in the prior-year period, an increase of 2.3 million bpd or 3.3 percent.
Yet concerns over whether the growth in consumption could last if Asia’s leading economies slow have contributed to a fall in almost a quarter in Brent and WTI prices since June.
In China, Asia’s biggest economy, activity in the manufacturing sector contracted for a second straight month in September, an official survey showed on Thursday, adding to signs of weakness in the world’s second-largest economy which are shaking global markets.
And in Asia’s second-largest economy, Japan, manufacturers’ confidence worsened in the three months to September and companies were cautious on the outlook, a central bank survey showed, as they felt the pinch from volatile financial markets and slumping shipments to China.
In corporate commodity news, Claude Dauphin, the powerful and influential oil and metals trader who built Trafigura into one of the world’s biggest commodity merchants, died on Wednesday after a battle with cancer, aged 64.