Singapore | Oil prices edged up in Asia Thursday after slumping for five-straight sessions to a three-month low after a surprise jump in US stockpiles built on increasing worries about a global supply glut.
US energy department data showed yesterday that inventories were 13.4 per cent higher on-year, while gasoline stocks were up 11.8 per cent indicating demand remains weak as the peak holiday driving season comes to a close.
The news sent Brent tumbling three percent and West Texas Intermediate more than two percent down to sit at levels not seen since April with both contracts now down about a fifth from their 2016 highs above USD 50 early last month.
Thursday bargain-buyers moved in helped by a weaker dollar after the Federal Reserve indicated any US interest rate increase would be slow and measured.
At about 0850 IST, US Benchmark West Texas Intermediate was up eight cents to USD 42.00 a barrel while North Sea Brent was up six cents at USD 43.53.
There is still a surplus and the oil price is going to have difficulty sustaining any rally because of that David Lennox, an analyst at Fat Prophets in Sydney, told Bloomberg News.
We’re now heading toward the end of the drive season and the market is probably going to weaken further.
The USD 40 a barrel level looks like the base at the moment. Prices fell to near 13-year lows below USD 30 a barrel in February, hit by an oversupply, tepid global growth, low demand and worries over China’s slowing economy.