Oil edges back above $48 after drop

Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at professional services firm EY, said the market would also be seeking clues from a meeting of OPEC and non-OPEC technical experts in Vienna on Wednesday.

Oil prices came under renewed pressure from worries about a global glut this week after US crude inventories rose more than twice what analysts had expected.

Gupta said a meeting between OPEC and non-OPEC oil producers yesterday “did not produce any meaningful results as no potential production cuts were addressed”.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for December delivery inched up 42 cents, or 0.88%, to trade at $48.27 a barrel.

Crude oil prices dropped in late September after Eurostat, the statistics office for the European Union, said regional annual inflation of -0.1 percent for September was a contraction from the 0.1 percent reported the previous month.

“The products markets seem to be taking a hit over concerns the refinery maintenance season has peaked, and there could only be inventory builds from here”, said Pete Donovan, broker at New York’s Liquidity Energy. Iran is preparing to boost output once world powers remove sanctions on its economy, regardless of any decisions by Opec, oil minister Bijan Namdar Zanganeh told reporters in Tehran.

US crude for November delivery rose 19 cents to $46.08 after closing down $1.37, or 3 per cent. The November contract expires on Tuesday.

USA crude oil inventories rose 8 million barrels last week, the government-run Energy Information Administration (EIA) said.

The Reuters poll had forecast a decline of just 900,000 barrels for gasoline and 1.3 million for distillates.

“It will be hard to place that (Iranian) oil”, he said.

According to industry research group Baker Hughes (N:BHI), the number of rigs drilling for oil in the USA decreased by 10 last week to 595, the seventh straight weekly decline.

Oil failed to sustain a gain above $50/bbl earlier this month amid signs the market surplus will persist as the Organization of Petroleum Exporting Countries continues to pump above its target.

“That helped pare a bit of those losses” in the day’s trading, Mr Smith said. USA stockpiles remain more than 100 MMbbl higher than the five-year seasonal average even as output falls and drilling rigs are idled.