Oil up in Asia but prices under pressure by supply glut
Singapore : Oil prices rebounded in Asia today after tanking in the previous session but the market remains under pressure by a global crude oversupply.
Prices were hammered yesterday after data showed that commercial crude inventories in the United States, the world’s top oil consumer, rose in the week to October 30.
US production also increased, further supporting forecasts that the crude supply glut that has weighed down oil prices for more than a year will persist well into 2016.
In Asia, US benchmark West Texas Intermediate (WTI) for delivery in December was trading 19 cents higher at USD 46.51 and Brent crude for December was up 25 cents to USD 48.83 at around 0330 GMT.
US stockpiles climbed by 2.8 million barrels to 482.8 million barrels, slightly more than analysts had expected, the US Department of Energy said yesterday.
US crude production climbed by 48,000 barrels to 9.16 million barrels per day, against some market expectations that low prices would steadily push output down.
Sanjeev Gupta, head of the Asia Pacific oil and gas practice at professional services firm EY, said a strong dollar boosted by expectations of a US interest rate hike in December will hurt demand for dollar-priced oil as the market awaits further data on major economies.
“A stronger US dollar will make crude more expensive for importing countries, thereby curtailing demand,” Gupta said.
“Key European economic data and US job statistics to be released tomorrow will provide vital clues about price development in the near term,” he said.