Oil Higher But Oversupply Hangs on Energy Market

Oil edged higher towards $42 a barrel on Wednesday after hitting its lowest since April the previous day, supported by an industry report showing a fall in U.S. inventories and a weaker dollar.

But prices could struggle to make much headway, analysts said, as sentiment remains bearish. A supply glut that has weighed on prices could increase if oil exports restart from ports in Libya that have been closed since 2014.

Brent crude LCOc1 was up 11 cents a barrel at $41.91 at 1121 GMT (0721 ET). It reached $41.51 on Tuesday, the lowest since April 18. U.S. crude CLc1 added 13 cents to $39.64.

“The sentiment is still quite negative and depressed on oil prices,” said Eugen Weinberg, analyst at Commerzbank.

“There are factors which should be supportive, but at the moment I think there is no single (piece of) news which would convince the bears that the decline is over.”

The U.S. dollar stayed close to a six-week low against a basket of currencies, lending oil some support. Weakness in the dollar makes dollar-denominated commodities cheaper for other currency holders.

via Reuters

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