Oil prices up but over­sup­ply wor­ries weigh

The Myanmar Times - - International Business -

OIL prices edged up in Asia yes­ter­day as the dol­lar weak­ened while bar­gain-buy­ers moved in fol­low­ing a re­cent sell-off but an­a­lysts warned a global sup­ply glut and weak demand will tem­per gains.

Prices hit three-month lows last week after US data showed an un­ex­pected in­crease in com­mer­cial stock­piles of oil and gaso­line, adding to wor­ries about a global crude sup­ply glut.

News that the US econ­omy grew slower than ex­pected also raised ques­tions about demand in the world's big­gest oil con­sumer.

How­ever, the weak read­ing nar­rowed the chances of a US in­ter­est rate hike this year, send­ing the dol­lar tum­bling, mak­ing oil cheaper for any­one us­ing other cur­ren­cies.

US bench­mark West Texas In­ter­me­di­ate for Oc­to­ber de­liv­ery rose 20 cents, or 0.48 per­cent, to US$41.80, and Brent was up 26 cents, or 0.26 per­cent, at $43.79.

But an­a­lysts said the uptick was un­likely to be sus­tained.

"There is a clear down­ward mo­men­tum to the mar­ket at the mo­ment," said Michael McCarthy, a chief strate­gist at CMC Mar­kets.

"There are con­cerns about the over­sup­ply sit­u­a­tion con­tin­u­ing. Clearly $40 a bar­rel is a key point for West Texas and I’d ex­pect to see sup­port there given the bounces we’ve seen pre­vi­ously at that level."

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