Singapore | Oil prices edged up slightly today after being hammered the day before by data showing a sharp rise in US stockpiles, while analysts warned a pick-up in the dollar would add further downward pressure.
Both main contracts plunged yesterday after the US Energy Department said commercial inventories in the world’s top oil consumer edged up last week and were now 16 percent higher than the same period last year.
The figures, which came despite a dip in production, poured fresh fuel on fears about a global supply glut that has dogged the crude market for years.
By the end of yesterday US benchmark West Texas Intermediate sank 3.6 per cent and Brent dived 2.7 per cent.
At around 0720 GMT on Thursday, WTI for delivery in October was up 35 cents, or 0.76 per cent, at USD 45.05 and Brent crude for November, a new contract, added 31 cents, or 0.66 per cent, to USD 47.20.
“The small rebound was due to intra-day traders taking back short-term positions,” said Jeffrey Halley, a senior market analyst at OANDA, told AFP.
“I expect any rally to be short lived and for WTI and Brent to test and possibly break supports at USD 44.00 and USD 46.50.”
Prices soared last month as OPEC and Russia agreed to hold talks to address the supply crisis.
But those gains have been slowly wiped away by a strong dollar making oil more expensive for holders of other units and uncertainty over OPEC member and key producer Iran’s participation in the talks.
Analysts remain doubtful oil producers will agree to any limits at the meeting in Algeria this month.
Traders are keeping a close eye on the release Friday of US jobs data, which could spur the Federal Reserve to hike interest rates and in turn send the dollar higher, denting oil demand further.