Oil prices edged up in Asia today after falling sharply in the previous session, as analysts predicted increased volatility and no end in sight this year to tumbling prices.
US benchmark West Texas Intermediate for January delivery rose 63 cents to $54.74, while Brent crude for February gained 16 cents to $59.43 in mid-morning trade.
WTI had dived $2.36 yesterday to its lowest since May 2009, while Brent tumbled $1.91.
““Until the issue of low global demand and oversupply is resolved, we will continue to see this type of market volatility as investors test the waters,” Daniel Ang, investment analyst at Phillip Futures, told AFP.
“There are two camps in the market at the moment. Some who believe prices can fall further, and others who are betting that it should be above $60,” Ang added.
Crude prices have plunged roughly 50 per cent since June owing to plentiful supplies, a strong dollar and weak demand as the global economy struggles, analysts say.
The Organisation of Petroleum Exporting Countries (OPEC), oil producers’ group that supplies about 40 per cent of the world’s crude oil, has so far declined to cut output to curb the price plunge.
Saudi Arabia, the leading OPEC producer, had said yesterday that competitive pressures prevent it from reducing output, and the kingdom can weather falling prices.
“It is difficult, or even impossible, for Saudi Arabia or OPEC to undertake any measure that would lead to a reduction in (their) share of the market and an increase in that of others” who do not belong to the cartel, Oil Minister Ali al-Naimi told the official Saudi Press Agency.