Oil prices hold above US$46 ahead of US report
Oil prices held above US$46 a barrel in Asia Tuesday ahead of a report on U.S. commercial crude inventories, a closely watched indicator of demand in the world’s top consumer.
A decline in U.S. drilling activity has supported prices recently, fuelling hopes a fall in production would help ease the global crude supply glut.
American benchmark West Texas Intermediate for November delivery was up 11 U.S. cents at US$46.37 in the afternoon after a volatile session in the morning. Brent crude for November advanced 18 U.S. cents to US$49.43 a barrel.
The U.S. Department of Energy will release its weekly stockpiles report Wednesday, giving a better idea about demand in the world’s biggest economy.
The report will probably show that inventories rose by 2 million barrels in the week to Oct. 2, a Bloomberg News survey showed, indicating slowing demand.
Reports that producer Russia was willing to discuss the global supply glut situation that has been weighing on the market also supported prices.
Daniel Ang, an investment analyst with Phillip Futures in Singapore, said the return of Iranian oil after it complies with an agreement on curbing its nuclear program is likely to be part of any talks.
“Oil prices dropping to this level and staying here for a prolonged period of time is definitely hurting major oil producers, Russia included,” Ang said in a market commentary.
Ang expects Iranian oil “to cause a 1 million barrel per day surplus of supply when Iran reaches maximum capacity and this would likely be the key topic of any meeting.”