November WTI (West Texas Intermediate) crude oil futures contracts have been showing the emergence of a price channel since early September 2015.
Brent and WTI crude prices are expected to strengthen marginally in the fourth quarter as oil production in the US weakens, but the longer term outlook for oil prices remains dismal, particularly for 2016 and 2017, analysts at BMI Research, a unit of Fitch Group, said.
US crude was 8 cents at $44.82 a barrel.
Oil prices fell more than 1 percent on Thursday as the government’s storm monitor altered forecasts for the path of the latest USA hurricane, snuffing out an early rally that was prompted by fears of storm damage to U.S. East Coast oil installations.
Global benchmark Brent LCOc1 gained 47 cents to $48.16 a barrel by 0324 EDT.
In the United States, a closely-watched report seen as a gauge for oil demand in the world’s biggest economy showed that commercial crude inventories rose by four million barrels to 457. Prices across other commodities like copper and base metals also strengthened.
However, emerging market recovery remains on shaky ground and oil markets are likely to remain sensitive to macroeconomic developments, especially from China and the U.S.
Employment data for September, to be released later Friday, is important because an improvement in the labour market is a key factor supporting the Federal Reserve’s plan to hike its near-zero interest rates, analysts said. Societe Generale, for instance, expects USA oil prices to trade in the $40-$50 a barrel range over coming months, as the US oil sector adjusts to a low price environment.
Traders said liquidity was low during Asian trading hours due to China’s National Holiday which lasts until October 7 but that the active dealers were pricing in a political risk premium into oil markets over Syria, where Russian Federation and the U.S. are carrying on bombing campaigns.
The strong vehicle demand is seen as bullish for palladium, though platinum is still suffering after Volkswagen’s emissions scandal last week raised concerns about diesel engine demand.