23 Jul 2015
Oil sees moderate strength, global glut weighs
FXStreet (Mumbai) - Oil prices at both the sides of the Atlantic trade with moderate gains even though the USD index recovered losses after the upbeat weekly US jobs data.
Concerns of oversupply
Despite the resilience, the gains are being capped by global glut worries. The WTI crude futures in the US settled below USD 50/barrel for the first time since early April on Wednesday after an unexpected increase in US crude inventories.
The US Energy Information Administration said on Wednesday that weekly oil inventories increased by 2.5 million barrels, while analysts were expecting a fall. The data added to the worries that oil market shall remain unbalanced due to excess supply from OPEC and Non-OPEC members and lack of sufficient rise in global demand.
A weaker USD did give a boost to the crude prices in the European session, but concerns of oversupply made sure the gains remain under check.
The front month WTI contract 0.35% higher at USD 49.36/barrel and the Brent crude contract is trading 0.20% higher at USD 56.24/barrel.
Concerns of oversupply
Despite the resilience, the gains are being capped by global glut worries. The WTI crude futures in the US settled below USD 50/barrel for the first time since early April on Wednesday after an unexpected increase in US crude inventories.
The US Energy Information Administration said on Wednesday that weekly oil inventories increased by 2.5 million barrels, while analysts were expecting a fall. The data added to the worries that oil market shall remain unbalanced due to excess supply from OPEC and Non-OPEC members and lack of sufficient rise in global demand.
A weaker USD did give a boost to the crude prices in the European session, but concerns of oversupply made sure the gains remain under check.
The front month WTI contract 0.35% higher at USD 49.36/barrel and the Brent crude contract is trading 0.20% higher at USD 56.24/barrel.