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17 Dec 2015
Oil: gains capped by oversupply and strong USD
FXStreet (Mumbai) - Oil prices edged higher on Thursday, but the gains remain capped on account of the strong USD and excess supply situation.
At the time of writing, WTI Jan futures were largely unchanged at USD 35.53/barrel, while Brent Feb futures were up 0.76% or 29 cents at USD 37.70/barrel.
The minor uptick appears a technical/chart driven recovery as prices have dropped 17% after the OPEC pushed up the output ceiling on Dec 4th. The US government data showed a surprise build in US inventories on Wednesday, which further heightened oversupply concerns.
Meanwhile, the USD remains strong after the Fed raised interest rates by 25-bps and put an end to the era of ultra easy monetary policy.
At the time of writing, WTI Jan futures were largely unchanged at USD 35.53/barrel, while Brent Feb futures were up 0.76% or 29 cents at USD 37.70/barrel.
The minor uptick appears a technical/chart driven recovery as prices have dropped 17% after the OPEC pushed up the output ceiling on Dec 4th. The US government data showed a surprise build in US inventories on Wednesday, which further heightened oversupply concerns.
Meanwhile, the USD remains strong after the Fed raised interest rates by 25-bps and put an end to the era of ultra easy monetary policy.