Oil prices up in Asia ahead of US crude inventories report

Wednesday, Jan 6, 2016,13:06 IST By metrovaartha A A A

Singapore | Oil prices edged higher in Asia today, ahead of the release of a US stockpiles report, with investors also keeping an eye on a worsening diplomatic row between Iran and Saudi Arabia.

The US Department of Energy will release later Wednesday its weekly inventory of commercial crude, with analysts surveyed by Bloomberg News expecting an increase of 500,000 barrels. At around 0605 GMT, US benchmark West Texas Intermediate for delivery in February was up eight cents at USD 36.05 and Brent was three cents higher at USD 36.45. Both contracts closed lower on Tuesday.

Despite today’s price uptick, the market mood remains bearish, said Daniel Ang, an analyst with Phillip Futures in Singapore. The deepening diplomatic spat between key producers Iran and Saudi Arabia remains a factor affecting prices but the market is oversupplied and traders are looking for opportunities to sell, he told AFP. Kuwait yesterday recalled its ambassador to Tehran and Bahrain severed air links as the diplomatic crisis over Saudi Arabia’s execution of a prominent Shiite cleric escalated, sparking international concern about regional instability. In a separate commentary, Ang said global demand not keeping pace with an ongoing supply glut will continue to be a key influence on prices over the long term. Judging from how oil supply and demand (situation) is not expected to improve at least in the first half of 2016, it would suggest that oil prices would continue being bearish, he said.