Monday, 09 November 2015 17:48
LONDON: Oil futures rose above $ 47.50 a barrel on Monday as OPEC said it expected global demand to remain strong next year, while weak Chinese trade data and concerns over rising supplies weighed.
A weaker dollar further supported oil, with Brent crude for December delivery up 22 cents at $ 47.64 a barrel by 0905 GMT, after falling more than 4 percent last week.
December US crude gained 12 cents to $ 44.41 a barrel after falling nearly five percent last week.
Abdullah al-Badri, Secretary-General of the Organization of the Petroleum Exporting Countries, said he expects that the oil market will become more balanced in 2016 as demand continues to grow.
“We see global oil demand maintaining its recent healthy growth. We see less non-OPEC supply. And we see an increase in the demand for OPEC crude,” he said in a speech published on the organisation’s website on Monday.
Global oil demand growth is set to reach a five-year high in 2015 at 1.8 million barrels per day, but is expected to slow down in 2016, the International Energy Agency said last month.
OPEC will meet on Dec. 4 to discuss the cartel’s strategy after last year it opted to maintain its output steady in the face of lower prices and rising US shale production.
The halving of oil prices since June 2014 continued to exert pressure on US oil producers that cut oil rigs for a tenth week in a row last week.
Hamza Khan, commodities analyst at ING Bank in the Netherlands, said any upside for oil is limited as oil producers around the world struggle to sell a surplus.
“It will be very difficult to see upside traction before the meeting in case OPEC announce they will maintain production at current levels,” he said.
“Any movements without fundamental support will be limited, specially on the upside.”
The dollar eased by about 0.2 percent versus a basket of currencies by 0900 GMT after hitting a near seven-month high on Friday following strong US jobs data that increased the likelihood of a rate increase by the Federal Reserve.
A stronger greenback makes dollar-priced assets more costly for buyers using other currencies. China’s trade surplus rose to a record of $ 61.64 billion in October, disappointing analyst expectations by a wide margin, driving up concerns over growth in the world’s top energy consumer as the country’s sector service also slowed.
“The market continues to look fragile and prone to lower numbers,” brokerage PVM said in a report.
