Oil Up in Asia but U.S. Crude Stays below $50 in Oversupplied Market
Oil prices rebounded in Asia Tuesday after falling sharply the day before but remained under pressure due to an oversupplied market, with U.S. crude staying below $50 a barrel.
U.S. benchmark West Texas Intermediate (WTI) for April delivery was up 11 cents to $49.56 while Brent crude for April gained 29 cents to $59.19 in late-morning trade.
WTI shed $1.36 in New York and Brent lost $1.32 in London the day before as U.S. crude stockpiles lingered at historic levels, contributing to a global supply glut.
A closely watched report on U.S. weekly crude stockpiles is next due on Wednesday, with a Bloomberg News survey saying inventories are expected to rise by 3.75 million barrels.
U.S. oil stockpiles are already at their highest level on record at this time of year.
Globally, crude supplies are also being boosted after oil fields in eastern Libya resumed pumping to the Hariga port after a pipeline was repaired, and oil producer Oman plans to ramp up output to 980,000 barrels a day this year, according to Bloomberg.
Crude prices lost about 60 percent of their value to about $40 between June and late January owing to an oversupply in world markets, a weak global economy and a strong dollar.
Prices have risen above multi-year lows following a slowdown in U.S. oil drilling activities, but analysts say volatility is likely to continue for some time.
"It is apparent by now that drilling in the U.S. will slow, global production growth is expected to be lower, and demand, at least in the U.S., is reacting positively to lower prices," British bank Barclays said in a report.
"In short, the market is forecast to remain oversupplied for most of 2015, but expectations beyond that are for more balanced fundamentals."
Source: Agence France Presse
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