Oil mar­ket edges up; global sup­ply glut may stymie rises

The China Post - - BUSINESS INDEX & -

World oil prices rose on Mon­day, ex­tend­ing last week’s gains, but the per­sis­tent global sup­ply glut will likely cap ad­vances, an­a­lysts said.

U.S. bench­mark West Texas In­ter­me­di­ate for de­liv­ery in May won 68 cents to US$52.32 a bar­rel.

Brent North Sea crude for May gained 79 cents to US$58.66 around mid­day in Lon­don.

“There has been a con­tin­u­a­tion in the rise of oil prices from Fri­day’s ses­sion, but the mar­ket has started this week cau­tiously due to the on­go­ing over­sup­ply sit­u­a­tion,” said Michael McCarthy, chief mar­ket with CMC Mar­kets in Syd­ney.

Both con­tracts closed last week up more than 5 per­cent thanks to a drop in the num­ber of U.S. oil rigs in op­er­a­tion, bet­ter eco­nomic data from Ger­many and eas­ing ex­pec­ta­tions that Ira­nian oil would re­turn to the mar­ket soon af­ter a deal with West­ern pow­ers over its nu­clear pro­gram.

But Sanjeev Gupta, who heads the Asi­aPa­cific oil and gas prac­tice at pro­fes­sional ser­vices firm EY, said: “In­creases in crude oil in­ven­tory in the U.S. and the an­nounce­ment of record out­put of crude by Saudi Ara­bia in

strate­gist March helped to limit gains in bench­mark prices.”

U.S. in­ven­to­ries in the week to April 3 surged nearly 11 mil­lion bar­rels to a fresh record high of 482.4 mil­lion, the U.S. Depart­ment of En­ergy said.

Mean­while in Saudi Ara­bia, Oil Min­is­ter Ali al-Naimi an­nounced out­put hit a record 10.3 mil­lion bar­rels a day in March.

The global oil mar­ket lost about 60 per­cent of its value to about US$40 per bar­rel be­tween June and late Jan­uary, ow­ing largely to an over­sup­ply in world mar­kets and the OPEC oil car­tel’s re­fusal to cut pro­duc­tion.

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