Oil was higher in Asian trade on Thursday, as a weaker dollar helped prices shrug off a massive increase in US crude reserves, analysts said. New York's main contract, light sweet crude for delivery in October, climbed 27 cents to $72.79 a barrel.
Brent North Sea crude for October delivery rose 37 cents to $73.85. A weakening greenback persuaded traders to buy into crude markets despite data from the US Department of Energy (DoE) on Wednesday showing soaring crude stockpiles, the Commonwealth Bank of Australia said in a report.
"A weaker US dollar (against the euro) more than offset negative sentiment from larger-than-expected increases in US crude oil, gasoline and distillate stocks last week," it said.
The euro was trading at $1.2691 against the greenback in morning Asian trade as compared with $1.2655 in New York on late Wednesday. A weaker greenback entices buyers using stronger currencies to snap up dollar-denominated crude due to its comparatively cheaper value.
The US DoE said crude inventories soared 4.1 million barrels last week, much more than the 200,000 drop analysts had expected, while gasoline stockpiles rose 2.3 million barrels, against forecasts for a 500,000-barrel decline.
Distillates, including diesel and heating fuel, gained 1.8 million barrels when analysts had pencilled in a smaller gain of 900,000 barrels. Rising stockpiles indicate weak demand in the world's biggest energy consuming nation.