Singapore | Oil prices rebounded in Asia today, rebounding from sharp losses driven by a report saying Saudi Arabia was close to completing an oilfield expansion that would ramp up output.
However, analysts say the gains would likely be short-lived owing to lingering worries about a global supply glut, while traders nervously await the release of US stockpiles data tomorrow.
At around 0330 GMT, US benchmark West Texas Intermediate (WTI) for delivery in June was up 31 cents, or 0.73 per cent, at USD 42.95 and Brent crude for June rose 30 cents, or 0.67 per cent, to USD 44.78.
Both contracts dived yesterday after Bloomberg News said Saudi state oil company Aramco will complete the expansion of its Shaybah oilfield by the end of May, allowing the world’s largest exporter to maintain total capacity at 12 million barrels a day.
Those losses broke a week of gains that came on the back of upbeat data out of China, the world’s biggest energy user, and speculation talks to limit production could be restarted.
But Michael McCarthy, chief market strategist at CMC Markets in Sydney, told although we are seeing some positive moves in our trading session today, they have come on very light volumes.He noted that attention would be on tomorrow’s reading on US commercial crude supplies, which are currently near historic highs.
Also tomorrow the Federal Reserve will wrap up its latest policy meeting. While it is not expected to unveil any new measures, dealers will be hoping for some forward guidance on monetary policy and any future interest rate hikes.
The world oil market has been hammered over the past two years by weak demand, overproduction, a slowing global economy particularly China and a supply glut.
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