Oil prices up in Asian trade

The Myanmar Times - - International Business -

OIL edged higher to near US$42 a bar­rel in Asia yes­ter­day but an­a­lysts said the in­crease was un­likely to last as the com­mod­ity re­mains un­der pres­sure by a sup­ply glut and a strong dol­lar.

Prices have been fluc­tu­at­ing since en­ter­ing a bear mar­ket last week, fall­ing more than 20 per­cent and clos­ing be­low $40 a bar­rel for the first time since April.

Ini­tially re­cov­er­ing as US com­mer­cial crude in­ven­tory data showed an un­ex­pected draw in gaso­line, prices tum­bled again later in the week af­ter ro­bust hir­ing num­bers from the US gov­ern­ment pushed the US dol­lar higher.

A stronger green­back typ­i­cally makes dol­lar-priced oil more ex­pen­sive for con­sumers us­ing other cur­ren­cies, dent­ing de­mand.

Weekly rig count data re­leased Au­gust 5 also showed that US drillers added seven rigs that week, up for the sixth­straight week and in­di­cat­ing higher pro­duc­tion ac­tiv­ity amid an over­sat­u­rated mar­ket.

“Mod­est short cover­ing has prob­a­bly given oil some boost,” said IG Mar­kets an­a­lyst Bernard Aw, adding that the bounce was un­likely to last.

US bench­mark West Texas In­ter­me­di­ate for de­liv­ery in Septem­ber was up 28 cents to $42.08 and Brent crude for Oc­to­ber gained 29 cents to $44.56 a bar­rel yes­ter­day.

“Up­beat jobs data from the US showed that the jobs growth was much higher in July than es­ti­mates, and helped to push the US dol­lar [higher], ap­ply­ing pres­sure on crude prices,” said EY Ser­vices oil and gas an­a­lyst San­jeev Gupta.

“While mar­kets will con­tinue to look for clues from eco­nomic data from China and Eu­ro­zone, due to the over­hang of high in­ven­tory lev­els and con­tin­u­ing con­cerns of over­sup­ply, crude prices are likely move in a tight range over the next cou­ple of weeks,” Mr Gupta added. –

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