Oil prices up in Asian trade
Analysts said a sharp fall in the dollar on Wednesday may also have spurred some buying as weakness in the US currency makes dollar-priced oil cheaper.
But analysts also noted that the unit will likely to gather strength before a Fed meeting next week in which the US central bank is widely expected to raise interest rates.
US benchmark West Texas Intermediate for delivery in January was up 26 cents at $37.42 and Brent crude for January was trading 43 cents higher at $40.54 at around 0700 GMT.
Prices have slumped about nine percent since Friday’s decision by the OPEC oil exporters club not to cut output despite pumping more than its target in the face of a global oversupply and weakness in the world economy.
There was some good news when the Department of Energy said Wednesday US oil inventories fell 3.6 million barrels in the week ending December 4, a booster for prices as it indicates an uptick in demand.
However, Sanjeev Gupta, who heads the Asia Pacific oil and gas practice at professional services firm EY, said: “The market remains weak overall due to global oversupply, compounded by the OPEC’s decision to leave its production quota unchanged.
“Investors will closely monitor the Federal Reserve’s policy-making meeting next week as dollar-dominated commodities will become more expensive if US dollar appreciates,” he said.
In a market commentary on Thursday, BMI Research said it expects prices to remain range-bound as the oil glut “persists to 2018”.