Oil up a fraction but near three-month lows on surplus supply

Oil prices rose in Asian trade Thursday as Europe struck back against the Islamic State (IS) group after the Paris attacks and after a mild rise in USA stockpiles, analysts said.

A warmer-than-average winter could weaken heating-fuel demand enough to trigger a drop in the price of crude to $20 a barrel, according to Goldman Sachs.

Futures are down 0.4 percent this week after falling below $40 a barrel Wednesday for the first time since August. At the end of the summer, WTI crude fell below $38 a barrel, tumbling to its lowest level since the height of the Financial Crisis.

“WTI couldn’t convincingly push below $40 despite a few attempts today and that’s what probably what led to the late support before contract expiry”, said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut.

News for bearish oil prices can not get any worse.

Oil benchmarks stayed within range of recent levels on Friday, hounded by oversupply concerns, while base metals recovered on short covering as the weekend approached. North Brent Sea crude futures have also experienced sharp declines over the last month of trading. Brent futures were up 40 cents at $44.58 a barrel by 11:49 a.m. EST (1649 GMT).

USA crude futures have been particularly battered, with data from the Energy Information Administration showing an eighth straight week of stock builds.

Crude Oil: The federal government’s EIA report revealed that crude inventories edged up by a nominal 252,000 barrels for the week ending Nov 13, 2015, following an increase of 4.22 million barrels in the previous week.

Further Kamal added saying that fluctuations in the USA dollar may impact crude prices and could make oil and other commodities expensive for other currency holders.

The Organization of Petroleum Countries has kept up production to pressure high-cost rivals, such as the developing US shale oil producers.

On the Intercontinental Exchange (ICE), brent crude for January delivery wavered between $44.07 and $45.50 before closing at $44.62, up 0.47 or 1.06% on the day. Crude oil prices are down almost 58% over the last 12 months. That time, OPEC upheld its production quota of 30 million barrels per day.

Traders believe that widening crude spreads will accelerate WTI’s descent to below the $37.75 low set on Aug 27, putting it on track to a new bottom since 2009.