Oil prices remain near multi-month lows due to continuing oversupply concerns despite a larger drawdown of US inventory.
US crude for September delivery gained 32 cents to trade at $46.06, up from Monday’s four-month low.
Oil prices rose Wednesday as dealers predicted that the latest U.S. crude stockpiles and production data will point toward upbeat demand in the world’s top crude consumer, analysts said. He produces articles and videos on the how-tos of technical trading.
Ruecker added that Julius Baer trimmed its forecasts for Brent prices to a range between $55-$60 per barrel “in the near term, but even lower longer term”.
Brent futures held losses after falling 5.2 percent on Monday to below $50 for the first time since January.
WTI and Brent crude oil have both remained above $50 a barrel during the last decade, but with output exceeding demand, a huge number of analysts are of the opinion that prices could go down.
A rate hike would likely strengthen the greenback, a negative for dollar-denominated oil because it becomes more expensive for holders of other currencies. The European benchmark crude traded at a premium of $4.71 to WTI. The EIA report showed that the US crude oil stockpile fell by 4.4 MMbbls (million barrels) to 455.3 MMbbls for the week ending July 31, 2015.
“The summer driving season is fading and we could see a quick ramp up in gasoline stocks”, said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland. The build came as U.S. refiners processed gasoline and distillates, which include diesel, at record high rates last week, taking advantage of strong refining margins.
Last week, data from the Organization of the Petroleum Exporting Countries (OPEC) showed that the group’s output was at its highest monthly level in recent history this July. Low prices are needed to offset productivity gains and keep investment to a minimum, the report said.
Consider that, according to the U.S. Energy Information Administration, U.S. crude oil production will average 9.5 million barrels a day in 2015 – up significantly from 8.7 million in 2014.