Oil rises in early trade

“Under the current Saudi oil policy, it is still more likely…that any sustained price recovery will come through another OPEC country breaking down than from North American crude oil production collapsing”, Olivier Jakob, an oil analyst at Petromatrix, said in a note. Gasoline stocks in the United States rose more than expected, overriding a bullish picture from a larger-than-expected drop in crude stockpiles and pushing prices down overnight to multi-month lows.

“While we maintain our near-term WTI target of $45/bbl, we want to emphasize that the risks remain substantially skewed to the downside, particularly as we enter the shoulder months this autumn”, Goldman analysts including Jeffrey Currie said in the report dated Thursday.

Brent crude for September delivery, meanwhile, was trading at $49.73 compared with Dollars 52.21 last week, and set for a sixth straight weekly fall.

“First there was an increase in gasoline and that weighed on the market”. The greenback strengthened against the yen and euro early on Wednesday after Atlanta Federal Reserve President Dennis Lockhart expressed his support for an interest rate hike in September. A strong dollar acts as a cap on commodity prices, so even if supply and demand both right themselves – an incredibly tall order – they will have to overcome FX challenges to boot.

After another leg down for crude oil prices, some are convinced that the bottom is in for energy in 2015.

“It is a continuation of a trend that has already started with global hydrocarbon majors such as ExxonMobil, BP, Shell, ConocoPhillips and Gazprom, among others, cutting down spending on exploration”, he said.

Data released by OPEC last week indicated that the oil cartel’s production held on its highest monthly level in recent history for the month July. Drillers have added a total of 32 oil rigs over the past three weeks.

The benchmark was on track to close the week almost six per cent lower, the biggest weekly fall since March.

“We still have a lot of global oversupply”, Michael Wittner, head of oil-market research at Société Générale in New York, said on Bloomberg TV Monday.

“India can insulate its economy by diversifying energy supply sources and by buying stakes in global oil and gas fields, to guard against the unforeseen”, he said.