Oil prices edged higher on Tuesday as a slump to near 11-year lows in the previous session whetted investors’ buying appetite but a lingering supply glut kept prices near troughs last seen during the financial crisis.
Brent crude LCOc1, the global benchmark, had risen 55 cents to $38.47 a barrel by 1253 GMT, having touched an intra-day high of $38.95. U.S. crude CLc1 was up 31 cents at $36.62.
“It’s technical buying. It’s pretty obvious shorts started to take profit when Brent prices dropped down to the 2008 low,” said Tamas Varga, oil analyst at London-based PVM Associates.
The dollar was also near a seven-week low against a basket of currencies, encouraging the purchase of dollar-denominated oil contracts.
In the United States, now the world’s biggest oil producer, congressional leaders inched closer on Monday to agreeing to repeal a 40-year old U.S. oil export ban.
If the United States started exporting large volumes of excess oil it would alleviate pressure on its swelling storage tanks.
“We read any lifting of the U.S. export ban as a significant structural change … Lifting the ban could help to clear US crude oil stocks,” said Olivier Jakob, an analyst at consultant Petromatrix.