Oil prices ticked higher Friday following the previous day’s sharp losses and helped by a weaker dollar, but analysts warned worries over the global supply glut would limit gains.
The commodity has come under pressure in recent weeks following Britain’s shock EU exit vote, while the US heads for the end of the summer holiday driving season with stockpiles still high.
Prices sank two per cent Thursday as traders were left disappointed by the lack of forward guidance from the European Central Bank on its stimulus, while the Bank of Japan’s governor threw cold water on hopes for robust measures from Tokyo.
Lower expectations for stimulus dented demand hopes, although they did help send the dollar down against the yen and euro, making crude cheaper for anyone holding the other currencies.
At about 0310 GMT, US benchmark West Texas Intermediate for September delivery was up by 11 cents, or 0.25 per cent, at $44.86, while Brent was up 20 cents, or 0.43 per cent, at $46.40 a barrel.
Crude had risen from near 13-year lows below $30 in February to above $50 in June owing to fires in Canada’s key oilfields, unrest in key producer Nigeria and the start of the US driving season.
However, with those issues now fading and dealers fretting over Brexit, prices have softened.
“Looking at the monthly chart, oil hasn’t gone above $50 a barrel ever since June 23,” CMC Markets senior trader Alex Wijaya told the news agency, referring to the date of Britain’s EU vote.
“There was a rally earlier this month, as you traditionally see in summer, but this is tapering off and the markets are starting to feel the effects of a supply glut again,” he added.
US official data showed that crude stockpiles had fallen for the ninth week in a row, but was hampered by a build in gasoline stockpiles.