Oil market edges up amid US oversupply concerns

29th November 2013, Comments 0 comments

Global oil prices nudged higher on Friday in subdued deals after the Thanksgiving holiday in the United States, with investors increasingly concerned over growing US crude stockpiles, analysts said.

New York's main contract, West Texas Intermediate (WTI) for delivery in January added 23 cents to $92.53 a barrel.

Brent North Sea crude for January firmed two cents to stand at $110.88 a barrel in London midday deals.

"Crude oil prices continue their consolidation mode on Friday," said analyst Myrto Sokou at the Sucden Financial brokerage in London.

"Due to the absence of major US macroeconomic data today, investors could have a standby approach to the oil market, as crude prices are struggling to find some direction."

Crude futures had drifter lower on Thursday with many US traders away for Thanksgiving.

"There hasn't been much market movement ... with few leads after the US Thanksgiving holiday," Desmond Chua, market analyst at CMC Markets in Singapore, told AFP.

He said WTI remained pressured by the sustained rise in official crude stockpiles over the past 10 weeks.

The US Department of Energy (DoE) on Wednesday reported that commercial stocks of crude increased by three million barrels last week, well above the 500,000 forecast by analysts.

Since September 13, commercial crude stocks have risen 35.8 million, or more than 10 percent.

"The supply glut in the United States is down to the fact that we haven't seen enough new transportation links between the Cushing, Oklahoma, stockpiles depot and the rest of the US, as well as the high production levels of shale oil," Chua said.

WTI traded above $100 a barrel for much of the summer, but has dipped since October 21 because of rising supplies and easing geopolitical tensions, including Washington's decision to hold off military action in Syria and better relations with Iran.

Concerns over escalating political strife in Libya, a member of the OPEC oil producing cartel, continued to drive European benchmark Brent crude.

Four soldiers and at least 10 people were killed Thursday during violence in the North African state in the aftermath of a three-day strike in protest over militias.

Protesters with a wide range of demands have been blocking oil and gas export terminals since late July, causing revenues to plunge 80 percent.

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© 2013 AFP

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