Oil prices hold above US$46 ahead of US re­port

The China Post - - BUSINESS INDEX & -

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.”

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