US oil inches higher

Oil inches higher.

Oil inches higher.

14 September 2015 – Oil markets were fairly stable in early Asian trading on Monday, with US crude contracts receiving support from reduced American drilling, although falling global car sales weighed on international markets.

US crude futures were trading at $44.86 per barrel early on Monday, up 23 cents from their last settlement, pushed by a slight fall in drilling activity.

“Baker Hughes reported US oil rig count fell 10 to 652 last week. The consecutive second decline suggests a low price environment coupled with low oil price hedge is starting to impact US supply,” ANZ bank said.

The International Energy Agency (IEA) said on Friday that a cut in production from non-Opec suppliers, especially from the US, would lead to a rebalancing of the market by next year.

Despite this, the outlook for global oil markets remained weak due to strong production clashing with stalling demand, creating a market in which more oil is produced than needed.

The global crude benchmark Brent was trading at $48.16 a barrel, virtually flat from its last close.

ANZ said strong supply from the Middle East remained a concern on the supply side, while Macquarie bank noted that falling auto sales in August were acting as a drag on demand.

“Sales were 1% lower YoY (year-on-year), slightly more than the 0.8% fall seen in July 2015,” the bank said, although it added that sales could pick up towards the end of the year.

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