Oil prices up but oversupply worries weigh
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."