Oil market edges higher despite weak demand outlook

15th September 2015, Comments 0 comments

World crude prices climbed on Tuesday but gains were tempered by weak demand and excess supplies, dealers said.

US benchmark West Texas Intermediate for delivery in October added 28 cents to $44.28 a barrel compared with Monday's close.

Brent North Sea crude for October rose nine cents to stand at $46.46 a barrel around midday in London.

Expectations that US crude oil inventories expanded for a third week and news that the OPEC cartel has slashed its demand growth forecast for next year are keeping a lid on any price rally, analysts said.

Bloomberg News said it expects US crude stockpiles to have risen by 1.75 million barrels in the week to September 4.

The US Energy Information Administration (EIA) will release Wednesday the official stockpiles data, a gauge of demand in the world's top oil consuming nation.

"Prices are unable to make much headway as the market expects US crude stockpiles to expand for the third straight week ahead of the EIA report," said Bernard Aw, a Singapore-based market strategist at IG Markets.

The Organization of the Petroleum Exporting Countries on Monday cut its 2016 forecast for global demand "due to the projected slower economic momentum in Latin America and China".

The cartel said demand would grow by 1.29 million barrels per day to 94.08 million barrels a day next year, 50,000 barrels less than its previous estimate.

Traders are also watching out for the US Federal Reserve meeting this week to see whether policymakers would raise interest rates for the first time since 2006.

Analysts say that a hike in the zero-level benchmark rate would likely push the dollar higher, making dollar-priced crude oil more expensive and potentially further damping demand.

burs/rfj/bcp/boc


© 2015 AFP

0 Comments To This Article