Oil prices edged up in Asian trade on Friday following a decline in US crude inventories, although heavier buying was tempered by expectations a return of Iranian crude into the market will further increase global supplies.
US benchmark West Texas Intermediate for November delivery rose eight cents to $44.99 and Brent crude gained six cents to $48.22.
“Oil markets are caught in a range bound trade, with little or no clear directions of where prices are heading,” Bernard Aw, market strategist at IG Markets in Singapore, told AFP.
“From a broader perspective, few things have changed fundamentally,” he said, referring to supplies continuing to outpace demand.
On Wednesday the US Department of Energy (DoE) said commercial crude inventories sank 1.9 million barrels in the week ending September 18, indicating a pick-up in demand.
However, the report also showed output at home rose for the first time after six weeks of falls.
Also, Aw said prices were being hurt “by the potential increase in global supply on expectations that Iranian oil would get back on the market when the sanctions are lifted”.
Iran is currently being monitored for its compliance under a deal with major world powers to curb its nuclear ambitions in return for the lifting of crippling western economic sanctions that have restricted its oil exports.
Analysts say Iran can start ramping up its exports within months after it is given the all-clear by international inspectors and this could offset any cuts in US production in the oversupplied crude market.
“WTI and Brent prices remained trapped within the $40 to $50 range, and should stay there for the rest of the month,” Aw said.