Monday, 16 November 2015 18:47
LONDON: Oil prices climbed on Monday on geopolitical tensions sparked by the deadly terror attacks in Paris, but analysts said a global crude supply glut is likely to restrict the gains.
At about 1230 GMT, US benchmark West Texas Intermediate for delivery in December was up 91 cents at $ 41.65 a barrel.
Brent North Sea crude for January delivery won 54 cents to $ 45.01 a barrel.
“Price increases fuelled by geopolitical tensions will only be for the short term,” said Phillip Futures analyst Daniel Ang.
“For the longer term, the main driver for prices will be global supply and demand, and with the glut it would be a bit more difficult for prices to move up a lot further,” he told AFP.
Ang said Monday’s uptick was helped by bargain-hunting after prices dropped to two-month lows Friday following data showing commercial crude stockpiles in developed nations had risen to record highs.
But a strong dollar was also dampening price increases.
Oil is traded in the US currency and a strong dollar makes the commodity more expensive to holders of weaker units, hurting demand.
Oil prices have plunged by more than half since reaching peaks of above $ 100 a barrel in mid-2014 owing to the supply glut, near record output levels and a slowdown in the global economy, particularly major energy user China.
