Oil prices up in Asian trade
Singapore: Oil prices rose on bargain- hunting in Asia today after falling last week but a supply glut and a resurgent dollar are likely to temper gains, analysts said.
US benchmark West Texas Intermediate for July delivery climbed 14 cents to USD 59.86 a barrel and Brent crude for July added eight cents to USD 65.45 in late-morning trade.
Bernard Aw, market strategist at IG Markets Singapore, said the rise was due to “some dips buying” after last week’s losses.
“Signs of increased drilling activity as US drillers add onshore rigs as well as falling US crude production have likely also delivered a boost to sentiment,” he added.
“However, it is good to bear in mind that US supplies remain high and a dollar resurgence may temper any upticks in oil prices.”
The dollar strengthened on a pick-up in US inflation and after the Federal Reserve said its plans to raise interest rates this year remained on track.
Fed chief Janet Yellen said on Friday she expects to hike rates from historic lows “at some point this year”, warning that a delay could risk overheating the economy.
Her comments came two days after minutes of the Fed’s April policy board meeting made clear that slow growth in recent months meant it was not expecting a rise before late July.
A global crude oversupply is also a drag on prices.
The OPEC oil cartel, led by Saudi Arabia, is likely to resist attempts to cut output at a Vienna meeting on June 5 as preserving market share remains a top priority, according to industry analysts.
A decision by the 12-member Organisation of Petroleum Exporting Countries not to cut production in November sent prices crashing 60 per cent before a partial recovery.