Oil prices edged up in Asia on Tuesday, a day after retreating on a stronger dollar, but worries about a global supply glut are keeping gains in check ahead of a key producers’ meeting next month. Both main contracts tumbled yesterday after Federal Reserve boss Janet Yellen indicated a possible US rate hike this year, sending the greenback rallying and making crude more expensive to holders of other currencies.
Investors moved in to pick up bargains Tuesday and at about 0400 GMT, US benchmark West Texas Intermediate rose 21 cents, or 0.45 per cent, to USD 47.19 while Brent was 13 cents, or 0.26 per cent, up at USD 49.39. Attention is now on the release of US jobs data Friday — which should give an idea about the Fed’s plans for rates — before Russia and OPEC hold talks in Algeria to discuss the oversupply crisis that has dented prices for years. “It’s probably natural to see some bounce after yesterday’s per cent fall,” said Bernard Aw, market strategist at IG Markets in Singapore.
“As oil approaches the upper end of the USD 40-50 range, we need confirmation that oil majors are heading towards an agreement to stabilise the market for oil prices to push higher.”
The commodity has rallied in August on hopes Moscow and the Organization of the Petroleum Exporting Countries will find an agreement to limit production. Jeffrey Halley, senior analyst at currency trading firm OANDA, said: “Spikes above USD 48 in WTI and USD 50 in Brent crude are still being met by eager sellers, keen to reduce long positions ahead of Friday’s event risk.”