“Oil prices rose on the day but appear vulnerable to concerns of oversupply”, ANZ bank said, with traders pointing to an influx of new orders with the start of August.
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In the longer term, however, analysts still think that the market will tighten, bringing supply and demand more in balance.
On Monday, Iraqi oil officials said oil exports from Iraq’s southern ports rose to 3.2 million barrels per day (bpd) on average in July, up from 3.175 million bpd in June, as the OPEC nation increased crude production.
It’s the latest setback for oil bulls who thought crude was on a straight shot back to $60 and higher following the crash that began in late 2014.
Its survey found that supply from…
The recent selling has been driven by a realization that the epic oil glut remains largely intact – and some US oil companies may make it worse by starting to drill more.
Crude prices reached highs above $52 per barrel in June as oil supplies contracted due to disruptions in Canada, Nigeria and Libya as well as the faltering economy of OPEC member Venezuela.
Data on Friday also showed the United States added 44 new oil drilling rigs in July, the most for a month in two years, intensifying concerns that global production could once again get to unmanageable levels like in 2014-2015. “With spot prices getting under US$40 yesterday, we are not surprised to see spot prices rebounding on the gasoline draw”.
Also weighing on oil prices was data that revealed the U.S. oil rig count had climbed by 44 rigs in July, the highest monthly increase in over two years.
Brent crude fell US34 cents, or 0.8 per cent, to settle at $US41.80, after touching a session high at $US43.18.
Emerging sentiment about a slow, but steady, recovery in the market for crude oil helped prices recover Tuesday from a brief drop below $40 per barrel. “We expect global growth to move below consensus estimates”, Morgan Stanley said. October delivery Brent crude was down US18 cents, or 0.43 per cent, at $US41.96 a barrel at 0756 Wednesday AEST. Traders and analysts often watch this data for signs of what to expect from the US government’s official figures released a day later.
USA crude stockpiles probably dropped by 2 million barrels last week, according to a Bloomberg survey before a report from the Energy Information Administration on Wednesday.
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“The production number is key”, said Cavan Yie, senior equity analyst at Manulife Asset Management Ltd.in Toronto.
