Oil prices were mixed in Asia today, with WTI stuck below USD 50 a barrel after a rise in US stockpiles added to concerns over a supply glut, analysts said.
The US Department of Energy yesterday said the country’s commercial crude stockpiles rose 2.5 million barrels last week, while supplies at the closely watched Cushing, Oklahoma, hub were up 800,000 barrels.
The report also showed US production staying at near- record levels of about 9.6 million barrels per day, bad news for a market already awash with crude from the Organization of the Petroleum Exporting Countries (OPEC).
In late-morning Asian trade, US benchmark West Texas Intermediate (WTI) for delivery in September was up six cents at USD 49.25 after closing Wednesday below USD 50 a barrel for the first time since April.
Brent crude for September fell six cents to USD 56.12.
“US inventories expanded more than expected… which exacerbated the oversupply problem, especially when Saudi is pumping at record production levels,” said Bernard Aw, market strategist at IG Markets Singapore.
“OPEC produced 32.1 million barrels per day in June, with the largest increase coming from Iraq and Saudi Arabia. This was 2.1 million more than what the organisation said it will maintain,” Aw said in a market commentary.
A strong US currency is also putting further downward pressure on oil. With the commodity priced in dollars, it becomes more expensive for holders of weaker currencies, denting demand.
“The recent run-up in the greenback presented another pressure point for crude. It now looks like oil may move lower, with March lows of USD 42-USD 45 in the crosshairs,” Aw said.