USA benchmark West Texas Intermediate for August delivery was up 87 cents at $52.52 and Brent crude for August rose 81 cents to $57.86 a barrel in afternoon trade following recent sharp losses.
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The potential drop in crude oil prices also means a possible drop in home heating oil prices. Gasoline prices gained more than 2 percent.
Oil prices remain well below their levels from June 2014 where the resource was fetching closer to US$110 to US$115 a barrel due to the massive supply and demand imbalance that exists within the market.
That would be the highest annual production since 1970, which saw 9.6 million barrels a day, making it the most productive year ever for the United States.
A slew of global economic and geopolitical factors are working to pummel the price of oil and set up US drivers for very low gasoline prices later this year.
Another analyst, from Singapore-based Phillip Futures Limited, said that oil price will continue to display its lack of bullishness with the uncertainty coming from Iran talks.
Europe’s debt crisis and negotiations with deadbeat Greece have reached a turning point.
Analysts and investors will also be watching out for the latest data on US crude oil inventories, scheduled to be released at 10.30 a.m. Eastern Time.
The Indian basket of crude oil on the last trading day on Tuesday fell to Dollars 56 a barrel, as China’s stock market-plunge and the Greek crisis revived the spectre of weaker economic growth that could impact oil demand.
World powers were close to a deal on Thursday that could lead to a lifting of western sanctions against Iran, though negotiators remained deadlocked on the issue of arms and missile trade. Back in May we highlighted a Bloomberg report showing that the daily rate of oil supertankers surged to the highest level in seven years on a sudden rise in demand from producers. Analysts doubt the country can meet that goal, but Iran might be able to send out another 500,000 barrels a day.
“After all, the reopening of a major oil terminal in Libya will probably see additional oil reaching the market from Libya in the next few days, further increasing the oversupply”. A stronger greenback made the dollar-priced crude more expensive and less attractive for buyers holding other currencies.
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After hitting a six-year low of $43.46 in mid-March, oil rose to nearly $60 in late April as refiners processed enormous amounts of crude for the summer driving season.
