Oil up in Asia but prices under pressure by supply glut
Prices were hammered Wednesday 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 four cents higher at $46.36 and Brent crude for December was up six cents to $48.64 at around 0610 GMT, eroding gains in the morning as prices came under pressure.
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 Wednesday.
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.
The data includes factory orders for September in Germany as well as eurozone retail sales numbers and economic forecasts.
In the United States, the government will release labour costs and productivity data for the third quarter as well as the weekly jobless claims figures that will give further clues on the health of the economy.
The US central bank has hinted it might raise interest rates during its December meeting.