SINGAPORE–Oil prices rebounded in Asia Wednesday following steep losses in the previous session, but analysts said gains were capped by a strong dollar and persistent concerns about a global supply glut. U.S. benchmark West Texas Intermediate (WTI) for July climbed 53 cents to US$58.52 while Brent crude for July delivery gained 61 cents to US$64.63 in afternoon trade.
Both contracts fell sharply Tuesday on worries about the crude oversupply and as the greenback soared against other major currencies, making dollar-priced oil more expensive and denting demand. The dollar strengthened against the euro after a European Central Bank official said the bank would ramp up its asset-purchase stimulus program in May and June to offset an expected financial market slowdown in the coming months. A robust report on U.S. housing construction also lifted the greenback. ��The strengthening of the dollar … was the reason for the three percent decline in crude prices yesterday,�� said Daniel Ang, an investment analyst with Phillip Futures in Singapore. Ang added that the crude market is ��bearish�� ahead of the weekly U.S. petroleum inventories report, due later Wednesday. The U.S. Department of Energy is expected to report stockpiles fell by two million barrels in the week ending May 15, according to Bloomberg News. They still remain near their highest levels on record, however.