United States crude prices edge up on short covering, but oversupply still bites

For the past week, crude imports averaged about 7 million barrels a day, down by 409,000 barrels a day compared with the previous week.

Brent, the global benchmark, rose 57 cents, or 1.3%, to $44.14 a barrel on ICE Futures Europe.

Oil prices retreated on Monday, failing to hold on to gains won earlier in the day on geopolitical tensions sparked by the deadly terror attacks in Paris.

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Crude has dropped by nearly half in the past year as the Organisation of Petroleum Exporting Countries pumped above its collective quota and Russian output rose to a post-Soviet high, outpacing demand growth.

US crude futures slipped by 72 cents to $41.02 a barrel.

WTI hit August lows on Wednesday, briefly falling below the $40 per barrel key psychological support, after an eighth straight week of builds in US crude stockpiles that took inventories to above 487 million barrels, or just below April’s record highs of almost 491 million.

The oil-market gains reversed a steady decline since November 5, mostly driven by signs that major producers were not cutting back, and by mounting stockpiles especially in the United States, in part due to the very mild fall weather.

The oil market has been pricing crude for future delivery at much higher rates as traders keep millions of barrels in storage with the hope of making more money in later sales.

According to the US Department of Energy, USA crude oil stocks grew by 252,000 barrels last week that was less than expected, and indeed the smallest increase in the last eight weeks.

US crude oil prices edged up in early trading in Asia on Tuesday, lifting it further away from over two-months lows seen last week, as traders price in a risk premium following the Paris attacks and the resulting French airstrikes in Syria. This “would likely be the trigger for adjustments through the physical market, pushing oil prices down to cash costs, which we estimate are likely around $20 (13 pounds) per barrel”, the bank added.

“Oil market sentiment has turned back to “max bearish” mode”, London-based Energy Aspects said in an analyst note.

China’s slowing economy has also impacted other commodities, including copper, which dropped to a near six-year low on Wednesday. USA refineries processed more oil as they ended seasonal maintenance.

Today at 15:30 (GMT) will be published data which may determine the future path of crude oil. For the same period, analysts had estimated an increase of 2 million barrels in crude inventories.